Key events
Asda to outsource cleaners in move GMB union calls ‘detestable’
Sarah Butler
Asda is to outsource its 3,500 cleaning staff in a move the GMB union has described as ‘detestable’.
The workers will switch over to two third-party companies – Bidvest and NIC Cleaning Services – and retain their terms and conditions in the process.
The shift comes as Asda battles to turn around slumping profits and falling sales since a debt-fuelled £6.8bn takeover in 2020 by the billionaire Issa brothers and the private equity firm TDR Capital. TDR has since taken majority control of the supermarket which is at risk of losing its spot as the UK’s third largest grocer to Aldi after non-fuel sales slid 3.3% to £21bn last year.
The latest job changes come after Asda reduced its workforce by more than 7,000 roles last year. Hundreds of Asda security guards employed by outsourcing firm Mitie are being consulted on potential redundancy or reduced hours, more than 100 head office jobs have been recently cut while 1,000 jobs in its George clothing and homewares business were outsourced to logistics firm DHL last year.
Rachelle Wilkins, GMB organiser, said:
Loyal, hard working cleaning staff will be worried sick about whether their job will still pay the bills or whether the axe will fall on them.” She claimed that outsourcing companies often offered worse pay and conditions once they had taken over a service.
However, David Lepley, the chief operating officer at Asda, said:
Our ambition is to deliver the cleanest stores in retail. We continue to review and invest in ways to enhance the customer experience, partnering with industry leaders to deliver the best solutions. This latest investment is another important step in our mission to raise the bar for customers. Having taken the time to learn from others, by partnering with Bidvest and NIC Services we have access to the very latest machinery and cleaning technology.
NatWest to offer emergency loans and interest rate cuts to drought-hit farmers
Kalyeena Makortoff
High street lender NatWest says it will offer emergency loans, interest rate cuts, and temporary pauses on loan repayments for struggling farmers hit by drought.
The banking group said it was increasing funding and support for customers in the agricultural sector, as prolonged dry weather leaves farmers struggling with water shortages, lower yields, and unseasonably early harvests.
Farmers working with livestock, meanwhile, have been hit by reduced grass growth and increased feed costs, while warmer conditions are increasing the risk of outbreaks of disease.
NatWest say they are now offering extra support ranging from a temporary pause on loan payments, to interest rate reductions, emergency loans, and overdrafts.
They said they would also fund farmers looking to prepare for future heatwaves, including by building new infrastructure like extra water storage and reservoirs that can be used during periods of drought.
NatWest said it was not yet seeing a surge in demand for extra funding but expected pressures on some farming businesses “to build over the coming weeks and months.”
Ian Burrow, head of agriculture at NatWest Group, said:
With harvests progressing earlier than usual in some areas and livestock farmers already relying on winter feed stocks due to poor grass growth, cashflow and feed availability could become increasingly challenging.
Brent crude jumps over $90 a barrel before easing
Oil prices have see-sawed: Brent crude jumped more than 2% to just over $90 a barrel, the highest level since 31 July, but has now dipped 0.3% to $87.53 a barrel.
It went higher earlier after a small cargo ship was attacked on Tuesday by Yemen’s Iran-aligned Houthis in the Bab el-Mandeb Strait, killing three crew members.
Maritime security sources told Reuters a small cargo ship was believed to have been targeted in the Red Sea, but the fate of the crew was unclear.
If confirmed, the fatalities on the Tanzania-flagged Tihamah would be the first deaths in a Houthi strike on a ship since Middle East conflict was triggered by US-Israeli attacks on Iran at the end of February.
Housebuilder Bellway cuts profit outlook amid weaker demand and rising costs
Bellway, one of Britain’s biggest housebuilders, has warned that the near-term outlook remains uncertain amid weaker demand and rising costs, and forecast full-year profit at the bottom end of its previous prediction.
Bellway shares fell 1%, after it said it now expects underlying operating profit of £320m for the year to the end of July, compared with its previous range of £320m to £330m, and last year’s profit of £303.5m. It will publish its full-year results in October.
Facing what analysts have called one of the most challenging markets in recent history, UK housebuilders are cutting back on buying new land and slowing construction as affordability concerns, political turmoil, and energy-driven cost inflation have taken their toll.
Despite a temporary upturn during the spring selling season, Bellway said demand slowed from April as mortgage rates increased, capping a tough year that included a hit from uncertainty around property taxes ahead of the budget last autumn.
To weather the market, it said it was finishing ongoing projects to generate cash, while being “highly selective” about land buying.
Bellway completed 9,695 homes in the year to July, beating its prediction of 9,300 to 9,500 homes and up 10.8% from the previous year, as it benefited from bulk sales. However, its forward order book shrank to £1.2bn, from £1.5bn a year earlier.
The company also announced another share buyback of £50m, with the current £150m share buyback to be completed later this month.
Quilter analyst Oli Creasey said:
While any beat is positive, the scale may not be enough for investors to really get excited about.
Bellway’s chief executive Jason Honeyman reiterated his call on the government to reduce stamp duty and announce a deposit support scheme for first-time buyers, saying this would drive economic growth and deliver much-needed homes.
We call on the government to act now to improve access to housing across all tenures, both by helping first-time buyers onto the property ladder and supporting the delivery of affordable and social housing for those who need it most.
The new prime minister Andy Burnham has denied plans to reduce or scrap stamp duty at the next budget which will be delivered on 28 October.
He has stuck to the previous Labour government’s goal of building 1.5m homes over five years, even though experts say it is unlikely to be achieved given the current low construction rates.
Flexible office space provider IWG’s shares slump
Shares in International Workplace Group slumped more than 11% after analysts flagged risks to cashflow at the flexible office space provider.
Shares in IWG, which owns the Spaces and Regus brands, are now down 5%, still the largest loser on the FTSE 250 index this morning.
The company said cost cuts would lift results from the second half of the year, as it grapples with higher debt and costs in the wake of the Middle East war, as well as workplace changes linked to AI.
IWG’s adjusted core profit edged up 1% to $265m in the six months to 30 June, while system-wide revenues climbed 11% to a record $2.4bn.
It reiterated its 2026 forecast of adjusted core profit between $585m and $625m, amid accelerating centre signings and rising customer enquiries. The company signed up 728 clients compared with 496 a year earlier, and opened nearly 400 centres, versus 309 last year. The business grew rapidly in recent years, after the pandemic revolutionised working patterns and demand for flexible office space.
Christian Schmitz, the chief executive, said:
Our strategy remains clear. We continue to expand our global coverage at pace, building an unrivalled network that extends from the world’s largest cities to smaller towns and regional markets.
Analysts at Jefferies flagged risks to cashflow and future share buybacks, even though the company stuck to its cost-cutting targets and forecast cashflow in the second half of the year ahead of last year’s. Cash flow before corporate activities stood at a negative $55m in the first half.
In June, IWG increased its share buyback programme by $50m to $150m.
Heathrow says need for expansion ‘clear’ as it loses title of Europe’s busiest airport to Istanbul
Heathrow airport has argued “the case for expansion has never been clearer” after it lost its position as Europe’s busiest airport to Istanbul.
Figures published today showed 7.86 million passengers passed through Heathrow’s four terminals in July, whereas its Turkish counterpart recorded 8.15 million passengers over the same period.
Annual figures from the trade body Airports Council International show Heathrow was Europe’s busiest airport from 1996 to 2019.
The UK’s biggest airport, located west of central London, lost that position in 2020 amid coronavirus travel restrictions before regaining it in 2023 and holding the title since then.
Heathrow’s July passenger total was 1.5% down compared with the same month last year, whereas Istanbul saw a 2.3% boost.
The US-Israel war on Iran has had an impact on Heathrow’s passenger traffic.
Its passenger numbers on Middle East routes in July were down 20.2% year on year.
Despite this, Heathrow continues to operate its two runways at near full capacity, and is seeking government permission to build a third.
An expansion proposal by the airport’s owners would enable it to accommodate 150 million passengers a year. It recorded 84.46 million passengers in 2025.
Heathrow said:
Heathrow is operating at capacity. The case for expansion has never been clearer, as Heathrow was overtaken in July by Istanbul airport as the busiest hub in Europe.
Our plans will ensure the country gets the infrastructure it needs to stay competitive and will deliver all-important economic growth.
The transport secretary, Heidi Alexander, launched a consultation on the renamed Heathrow expansion national policy statement in June, setting out the conditions needed if the project is to be given the go-ahead.
InterContinental Hotels Group revenue growth slows due to Iran war
InterContinental Hotels Group has reported slower revenue growth, as a sharp decline in the Middle East offset gains in the United States and China.
The company, which owns hotel chains including Holiday Inn, Crowne Plaza and Hotel Indigo, reported global revenue per available room (RevPAR) growth of 3.5% in the three months to June, down from 4.4% in the first quarter.
The FTSE 100 company’s shares fell 2.7% in early trading in London.
Demand from affluent travellers has remained resilient and IHG got a boost from people going to soccer World Cup matches held across the US, Canada and Mexico. However, the Iran war, now in its sixth month, has weighed on hotels and travel companies in the Middle East.
The Middle East, which accounts for about 5% of global revenue, recorded a 19% drop in RevPAR in the second quarter. RevPAR rose 5.4% in the Americas and 0.8% in China. IHG said it was on track to meet market expectations for annual revenue and earnings.
Elie Maalouf, the hotel group’s chief executive, said:
While there are ongoing impacts from the Middle East conflict, including some wider disruption to international travel flows, we continue to expect these to be fully offset by growth in demand elsewhere.
From mid-June, there was also the benefit of strong growth in the FIFA World Cup match locations, which is estimated to have added approximately 1.0%pts to the Americas region RevPAR growth for Q2; there was some further benefit in July, which is expected to benefit Q3 to a lesser degree. It is estimated that the event will contribute approximately 0.4%pts to Americas RevPAR growth for the full year 2026.
US-listed rivals Hilton and Marriott said last month that demand in the US remained strong, helped by the World Cup, and because wealthy travellers are undeterred by persistent inflation. Both companies also reported weaker revenue from the Middle East.
European stocks open flat to slightly higher; oil prices push higher
European stock markets have opened flat to slightly higher, while oil prices continue to push higher.
The UK’s FTSE 100 is trading 3 points higher at 10,865. The French market is also little changed while the German Dax, the Italian FTSE MIB and the Spanish Ibex all edged 0.2% higher.
On oil markets, Brent crude has climbed 1.6%, or $1.4 to $89.15 a barrel, edging closer to the $90 a barrel level, after Donald Trump demanded compensation from Iran, complicating the standoff over the strait of Hormuz.
Consumer confidence at near two-year high as World Cup and UK holidaying lift summer spending
Consumer confidence hit its highest level in almost two years in July, according to research that indicated the closing stages of the men’s football World Cup and more people holidaying in the UK lifted summer spending.
A truce in the Middle East conflict in June and the arrival of a new prime minister in No 10 also gave a lift to consumers after a long period of heightened uncertainty.
A long-running monthly consumer spending survey by Barclays showed that 30% of those surveyed felt confident about the strength of the UK economy in July – representing a 21-month high and a six-percentage-point improvement on June.
Consumer card spending grew by 2% year on year last month, after a 1.9% increase in June, Barclays said.
Nvidia links with Wall Street firms for $500bn AI financing deal
Nvidia has partnered with six major Wall Street financial institutions to raise more than $500bn (£370bn) capital for artificial intelligence infrastructure.
The Nvidia chief executive, Jensen Huang, said on X that the company has the option to backstop up to $125bn, or 25% of the potential deals.
The move highlights how surging demand for AI computing capacity is drawing institutional investors, as governments, companies and startups race to build out datacentres.
Big tech companies have signalled that spending on AI would not slow down, with combined outlays set to surpass $730bn this year. However, there has been concerns over the link between high valuations of tech companies and the need for vast investments to support their ambitions.
Nvidia signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR for the financing platforms. The deal will create financing platforms, allowing third-party investors to treat AI “compute” as an asset class.
Nvidia, which is worth $5.3tn, counts Google, Amazon, Microsoft and Facebook owner Meta among its customers.
“These financing platforms will help customers access scarce compute at scale and build the AI factories that will power every industry and country in the age of AI,” Huang said.
“Compute has become a critical infrastructure asset,” Joe Bae and Scott Nuttall, the co-chief executives of KKR, said in a joint statement.
Jefferies analyst Mohit Kumar said:
We are back to the situation where there is no war ongoing, but the Strait of Hormuz remains closed.
There is little official data to analyse the economic pressure on Iran. Estimates suggest that inflation is running north of 100%, with heavy pressure on essential commodities including food prices. The currency has depreciated by over 95%, though it is not a freely convertible currency and official data is not available.
While the Iranian economy may be under severe pressure and the common person bearing the brunt of the current crisis, economic pressure would take months to make an impact. It is not a free democracy which implies that the economic pain of the general population may not translate into action at the government level.
Trump also does not have the luxury of time. The longer the strait is closed, more inventories will be depleted and greater would be the impact on oil prices. As we have argued before Trump is sensitive to mid-term elections and keeping the Senate is important for him.
Thus while the current statement can continue for a few days or weeks, we see some from of a fudge deal being agreed on. We are not looking for a lasting peaceful solution as we do not see an easy way out of the current crisis. But more like we pretend and look the other way and let some traffic flow through, while Iran retains some form of control over the strait.
Introduction: Oil prices rise and gold hits two-month high after Trump makes new deal demands on Iran
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Oi prices have risen slightly this morning to the highest levels in more than a week, as hopes receded of a deal between the US and Iran to end the war and reopen the strait of Hormuz, after Donald Trump demanded compensation for damage incurred by the US.
Brent crude futures and US crude futures both rose about 5% on Monday after the US president’s responded to Iran’s demands for compensation and an end to sanctions and military threats, before it will restart talks with the US. Those conditions largely reflect the terms of the memorandum of understanding signed by both sides in June, which has since broken down.
Iran has been negotiating with Oman about how to reopen the strait of Hormuz, a key shipping passage, defining new shipping lanes, and got closer to a pact. The strait has effectively been closed for months, after the US and Israel started attacking Tehran on 28 February.
Trump said at the White House on Monday:
We’re going to ask for money for the damage they’ve done over a 50-year period. So if there’s damages to be paid, I think Iran should pay those damages.
He also said that he is happy to let economic pressure take its toll on Iran.
Brent crude is moving closer to $90 a barrel, rising 0.4% to $88.1 a barrel while US crude rose to $82.52 a barrel – the highest levels since 31 July for both global benchmarks.
Tony Sycamore, a market analyst at IG, told Reuters:
This is going to be almost a war of attrition now. You probably can see the [oil] market sitting around the $75 to $95 range while we wait to see who blinks first.
Gold has eased after hitting its highest level in more than two months.
Spot gold dipped 0.3% to $4,377 an ounce, after rising to $4,434.84, its highest level since 5 June earlier in the session. Investors are eagerly awaiting Wednesday’s US inflation data for clues on the US interest rate outlook, after week jobs data last week prompted traders to scale back bets that the Federal Reserve will raise rates next month.
Jefferies analyst Mohit Kumar said:
We still retain the view that the Fed or the Bank of England will not hike rates, though the European Central Bank may be tempted to deliver another hike at the September meeting. Tomorrow’s inflation data would be key for setting the tome of markets for the coming weeks. Our view is that this month’s and next month’s inflation data would be benign and would offer some room for [Fed chair Kevin] Warsh not to hike rates.
The Reserve Bank of Australia, the country’s central bank, kept its cash rate unchanged at 4.35% for a second meeting. It said the economy was slowing as expected but warned it may raise rates again if necessary to keep inflation under control.
Asian shares are a mixed bag. Japan’s Nikkei rose more than 2% and South Korea’s Kospi gained nearly 1%, while Chinese stock markets fell. The CSI 30 dropped 0.6% and Hong Kong’s Hang Seng lost nearly 1%.
The Agenda
