Pound, euro jump after report that Trump won’t impose new tariffs yet
The pound and the euro both jumped by more than 1% after the Wall Street Journal reported that Donald Trump will stop short of imposing new tariffs on US trading partners on his first day in office.
The newspaper reported that the Trump, who is sworn in as president later, plans to issue a broad memorandum today that directs federal agencies to study trade policies and evaluate US trade relationships with China and America’s continental neighbours.
The euro rose as much as 1.3% and is now 1.17% higher at $1.0392, while sterling gained 1.07% to $1.2291.
Oil prices have tumbled, as traders await Trump’s new policies, including plans to end the Russia-Ukraine war, and after a ceasefire took hold in Gaza yesterday. Brent crude has lost $1.07 to $79.72 a barrel while US light crude fell by $1.24 to $76.64 a barrel.
The FTSE 100 index has touched a new intraday all-time peak of 8,543.46, and is currently trading 0.37% higher at 8,37.41, a 32 point gain, amid growing optimism about Bank of England interest rate cuts this year.
Key events
Santander reviews its future in UK
Santander has rushed out a note to senior managers after it emerged that the Spanish-owned lender is reviewing the future of its UK business amid mounting frustrations over regulation.
The chief executive of Santander’s UK corporate and commercial bank, John Baldwin, sent out a memo outlining how to respond to clients and its 21,000 UK staff, who have been rattled by news that the bank could be put up for sale.
It comes as the Labour government heaps pressure on City watchdogs to do more to promote growth, including by watering down post-financial crisis regulations that ministers and bank bosses fear are dampening growth and driving away foreign investment.
Santander bosses have long been frustrated with British rules including the ringfencing regulations, which force bigger banks to separate and protect their consumer deposits from the rest of their investment banking operations. Watchdogs have promised to ease some of those restrictions, although the proposals are so far aimed at supporting smaller banks that have fewer deposits.
Santander, which entered UK retail banking through its acquisition of the Abbey National building society in 2004, is also grappling with the fallout of a growing car finance commission scandal, which analysts at RBC Capital say could cost the bank up to £1.9bn in compensation.
Kalyeena Makortoff
The Bank of England is looking at setting up a Singapore-style “concierge service” that would help foreign businesses to the UK, as it comes under pressure from ministers to do more to spur economic growth.
It was one of the proposals put forward in a letter addressed to prime minister Keir Starmer, chancellor Rachel Reeves, as well as business secretary Jonathan Reynolds, who are pushing UK regulators to put forward pro-growth proposals that can promote local investment by foreign and domestic businesses.
The letter, sent by the head of the Bank’s regulatory arm, the Prudential Regulation Authority, said the watchdog was looking at how it could “help to simplify and rationalise the UK regulatory regime or support UK growth in other ways.”
Discussing the “concierge service’ for new inbound foreign firms,” Woods said:
There has at times been some interest from industry in the idea of a ‘concierge service’ to help foreign firms navigate the UK when thinking about locating new businesses here – a comparison is sometimes made with the approach of the Monetary Authority of Singapore takes in this area, which we have examined closely.
We could potentially work up a proposal for such a service this year, but would need to liaise with the FCA, the Office for Investment and potentially other stakeholders in thinking about how to approach this.
Woods added that the PRA “would welcome a discussion with government” on its proposals “to see if they are worth pursuing further.”
Ministers are now summoning regulators to Downing Street for check-ins, to review their proposed plans and progress.
The PRA will be among those hauled into No 11 in the coming weeks.
Davos: Climate activists paint Amazon base green, disrupt helicopters
Climate activists sprayed green paint over Amazon’s base in Davos and disrupted helicopter landings at the start of the World Economic Forum’s annual meeting.
Swiss police ended both protests as thousands of global business and political leaders descended on the mountain resort on the opening day, where demonstrations over fossil fuels and climate change take place every year.
Demonstrators protesting over fossil fuels daubed orange symbols on the shop front where Amazon has set up a temporary base on the main street in Davos, as well as splattering green paint over the plate-glass windows, Reuters reported.
Greenpeace, which briefly blocked the heliport in Davos, called for “a fair tax on the richest people, to fund environmental protection and invest in a fair and sustainable future for humanity”.
Police moved in to remove around 10 protesters who were blocking two vehicles at the heliport entrance with bright yellow banners saying “TaxTheSuperRich”.
Greenpeace activist Clara Thomson told Reuters:
So far we have blocked 10-20 helicopters in one and a half hours. Over the course of the day we are expecting around 100 helicopters arriving here.
Top politicians and business leaders often arrive by helicopter in the Swiss Alpine resort. Security is tight at the WEF meeting, where one of the main themes for discussion this week is “safeguarding the planet”.
The WEF said on its 2025 programme that it is “crucial for businesses, governments, and civil society to work together to find common solutions and take decisive action”.
Crown Estate to build 200 zero carbon homes
The Crown Estate, King Charles’ property manager that looks after an ancient portfolio of land and property across England and Wales, is pushing ahead with three pilot projects to build 200 zero carbon homes across Bedfordshire, Hertfordshire, and Cheshire.
The firm has appointed three partners – gs8, igloo Regeneration, and TOWN – to deliver the homes, in line with the Passivhaus standard.
The Crown Estate hopes to understand how the industry can improve the quality of homes, improve the energy security for those living in them, and then explore how to deliver them at scale across the UK.
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gs8 will deliver 50 net zero carbon homes in Wootton, Bedfordshire. It specialises in de-constructable homes for future reuse.
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TOWN will oversee 80 homes at Westwick Row in Hemel Hempstead, Hertfordshire, adjacent to the Crown Estate’s East Hemel site. The project will explore alternative housing models, including collaborative housing and intergenerational living.
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igloo, a subsidiary of socially conscious fund manager Thriving Investments, part of the Places for People group, will lead the development of 60 homes in Knutsford, Cheshire.
Pound, euro jump after report that Trump won’t impose new tariffs yet
The pound and the euro both jumped by more than 1% after the Wall Street Journal reported that Donald Trump will stop short of imposing new tariffs on US trading partners on his first day in office.
The newspaper reported that the Trump, who is sworn in as president later, plans to issue a broad memorandum today that directs federal agencies to study trade policies and evaluate US trade relationships with China and America’s continental neighbours.
The euro rose as much as 1.3% and is now 1.17% higher at $1.0392, while sterling gained 1.07% to $1.2291.
Oil prices have tumbled, as traders await Trump’s new policies, including plans to end the Russia-Ukraine war, and after a ceasefire took hold in Gaza yesterday. Brent crude has lost $1.07 to $79.72 a barrel while US light crude fell by $1.24 to $76.64 a barrel.
The FTSE 100 index has touched a new intraday all-time peak of 8,543.46, and is currently trading 0.37% higher at 8,37.41, a 32 point gain, amid growing optimism about Bank of England interest rate cuts this year.
EU takes China to WTO over high-tech patent royalties
The European Commission has filed a complaint at the World Trade Organisation against what it described as China’s “unfair and illegal” practice of setting worldwide royalty rates for EU standard essential patents without the patent owner’s consent.
The Commission, which oversees the trade policy of the 27-nation European Union, said China had empowered its courts to set worldwide rates for high-tech EU companies, notably in the telecoms sector. It said in a statement:
This pressures innovative European high-tech companies into lowering their rates on a worldwide basis, thus giving Chinese manufacturers cheaper access to those European technologies unfairly.
China‘s commerce ministry said it regretted the EU’s move and that China would handle the matter in accordance with WTO rules while safeguarding its legitimate rights and interests.
The case relates to standard essential patents (SEPs), which protect technologies essential for the manufacture of goods that meet a certain standard, such as 5G for mobile phones. European SEP holders include Nokia and Ericsson .
The Commission has requested consultations with China, the first step in WTO dispute settlement. If no satisfactory solution is found within 60 days, the EU executive can ask that an adjudicating panel be set up. Panel proceedings take an average of 12 months.
A charging company has said proposed UK changes to electric car sales rules could increase uncertainty over demand, as it said that it had been caught out by lower numbers of purchases by British drivers.
Pod Point, which is majority-owned by EDF Energy, said weak demand for new cars meant it made revenues of £53m in 2024 from its sales of chargers and services, compared with a £60m target. The London-listed company’s share price slumped by more than a third on Monday morning.
The car industry has been warning of tough market conditions for more than a year, with slower sales across the market hitting electric cars particularly hard, because they still tend to be more expensive upfront (although not in the long run) than petrol equivalents.
The weakness has prompted the industry to lobby the UK government to relax sales quotas, known as the zero-emission vehicle (ZEV) mandate. The rules force carmakers to sell more electric cars every year.
The headline target for 2024 was 22%, rising to 28% this year, but carmakers also have significant “flexibilities” that allow them to effectively sell fewer cars and the government has opened a consultation that is expected to relax the rules further.
For charger companies, the prospect of even lower electric car sales would be a blow. Melanie Lane, the Pod Point chief executive, said there was “a difficult market backdrop” in the EV industry, with a “weaker-than-expected private EV market” that hit its sales of home chargers.
The accounting firm KPMG is under investigation by the sector’s UK regulator over its audit of the 2022 accounts of the gambling company Entain.
The Financial Reporting Council (FRC) said its enforcement division would be examining the conduct of the “big four” accounting firm, without saying what the investigation related to.
“We will cooperate fully with the FRC to conclude this matter as quickly as possible,” a KPMG UK spokesperson said.
Entain, which owns brands including Ladbrokes, Coral and Sportingbet, declined to comment on the investigation.
It also did not comment on whether the investigation into KPMG relates to a settlement it reached with HM Revenue and Customs in 2023 over alleged bribery in a Turkish business it previously owned.
Government bond yields are steady, with investors focused on Donald Trump’s inauguration later today.
He will be sworn in at midday in Washington DC (5pm GMT), his second term after four years away, and has promised a flurry of executive orders concerning immigration, energy and tariffs.
The yield, or interest rate on Germany’s 10-year bond, the benchmark for the eurozone, was up 1 basis point at 2.514%, but down from a seven-month high of 2.630% hit last week, when a global sell-off in government bonds drove yields sharply higher. Italy’s 10-year yield was also 1bp higher at 3.655%.
US markets are closed for Martin Luther King Day.
The UK 10-year gilt yield rose by 3bps to 4.695% – but remained well below the 17-year high above 4.8% it hit on 8 January. The bond market meltdown indicated higher government borrowing costs, and heaped pressure on Rachel Reeves, the UK chancellor.
The pound is still trading 0.3% higher at $1.2195, as the dollar slipped 0.3% against a basket of currencies, following months of “Trump trade” gains.
The FTSE 100 index has given up some its earlier gains where it traded close to Friday’s intra-day record peak, and is now 0.15 ahead at 8,512.
In Davos, the World Economic Forum’s annual meeting will bring together close to 3,000 business and cultural leaders, and 350 political leaders, including 60 heads of state and governments.
The meeting convenes under the title Collaboration for the Intelligent Age.
For the Swedish furniture retailer Ikea, the fewer trade tariffs there are, the better, the chief executive of Ingka Group, the biggest global Ikea franchisee, told Reuters on the sidelines of the conference. His comments came as businesses braced for higher possible US tariffs under Donald Trump.
Jesper Brodin said:
We, and I think probably all international companies thrive from harmonised tariffs, if you like, and actually, the fewer the better, because at the end of the day there is a risk in any country with tariffs that you need to, as a company, pass it on to the customers.
Inflation and high interest rates have had a “damaging” impact on consumers over the past few years, Brodin said, adding that he saw demand improving.
We are quite optimistic about the outlook and we already see a shift where people are returning to, I would say, a normal situation when it comes to consumption.
Ingka Group, which runs Ikea stores in 31 countries and accounts for 90% of global Ikea sales, reported a drop in profits and sales last year, after cutting prices to lure inflation-weary shoppers back to its big blue stores.
Despite weak consumer demand, Brodin said his only real worry was climate change. Pointing to the severe economic impact of extreme weather events like the Los Angeles fires, he said leaders of Europe, the US, and China must cooperate to combat climate change.
There is still a myth out there that adapting to mitigate climate change will be an economic loss, in IKEA we have found that is absolutely the opposite.
We are here to meet other peers and businesses, government leaders in order to speed up the change because the world is not acting fast enough on this.
Ex-M&S boss says working from home is ‘not doing proper work’
The former boss of M&S and Asda has said working from home has meant a generation of people is “not doing proper work”.
Stuart Rose, who was chief executive of M&S for six years until 2011 and then executive chair of its supermarket rival Asda until November, claimed that working from home had harmed employee productivity – a longstanding problem in the world’s wealthier economies.
Lord Rose told BBC One’s Panorama:
We have regressed in this country in terms of working practices, productivity and in terms of the country’s wellbeing, I think, by 20 years in the last four.
The number of people working from home in the UK more than doubled between December 2019 and March 2022 from 4.7 million to 9.9 million, as the Covid pandemic forced people into lockdowns from March 2020 onwards.
Office workers were by far the most affected, although most people in Britain did not work from home. Since then some of the changes have remained, even as pandemic restrictions disappeared.
However, several big companies have told workers they must come into the office more, or even abandon hybrid working completely.
Average London salary 68% higher than Burnley equivalent, says thinktank
The average London worker could quit their job in August and still be paid what an average worker in Burnley would make in a year, according to a report highlighting Britain’s stark regional pay divide.
Calling on the government to close regional pay divisions and increase economic growth, the Centre for Cities said the average annual wage for an employee in London was almost £20,000 higher than in the lowest-paid places in the UK.
With an average wage 24% higher than the national average, workers in London typically are paid 68% more in a year than their peers in Burnley. The average wage in the east Lancashire town, of £29,508, would take a worker on the capital’s average, of £49,455, just eight months to earn.
Publishing its annual Cities Outlook report, the thinktank said the pay divide primarily resulted from some cities having more “cutting edge” private sector jobs and businesses than others. Places with the highest pay, including London and Cambridge, have more than twice as many cutting-edge companies and three times as many jobs in leading sectors – such as biotech and AI – as the country’s lowest-paying towns, such as Burnley, Huddersfield and Middlesbrough.
UK housing market ‘starts new year with a bang’, says Rightmove
A record number of new sellers have come on to the UK housing market since Boxing Day, while the average price and the number of sales agreed also increased, pointing to a busier 2025, according to a report.
The average price of a property coming to market rose by 1.7%, or £5,992, this month to £366,189, the biggest jump in prices at the start of the year since 2020, the property website Rightmove said in its monthly report. While prices usually bounce back in the new year after a seasonal fall in December, before Christmas, the rise was pronounced this month.
Buyers are understood to be more comfortable bidding for homes in response to falling interest rates, which could fall more steeply this year after official figures showed inflation fell in November by more than expected to 2.5%.
Values were still almost £9,000 below May 2024’s all-time record, though, reflecting affordability constraints among some buyers.
The number of new properties coming to market was 11% higher than a year earlier while the number of buyers contacting agents about properties for sale since Boxing Day is 9% ahead of last year, and the number of sales being agreed over the same period is up by 11%.
