Connect with us

Published

on

Global financial markets have been on a rollercoaster ride over the past few days, but now, with President Donald Trump having paused his “retaliatory” tariffs, the situation should stabilise.

Here, we outline how the pound in your pocket has been affected.

Stock markets, bonds and currencies moved sharply after Mr Trump put a 90-day pause on tariffs other than the base 10% tax slapped on almost all imports to the US. China still faces a levy of 125% on the goods it exports to the US.

But there have still been some impactful changes since his so-called “liberation day” tariff announcement last week.

So, what’s happened?

Well, last week two more interest rate cuts were expected by the end of this year, but now traders are pricing in three cuts by the Bank of England.

Borrowing will become cheaper as the interest rate is now anticipated to be brought down more than previously thought, to 3.75% by the end of 2025 from the current 4.5%.

More on Tariffs

Tariffs latest: Beijing takes fight to Trump
Money blog: ‘Barclays just sent me £50’

It’s not exactly for a good reason, though. The trade war means the UK economy is forecast to grow less.

This lower growth is what’s making observers think the Bank will cut rates sooner – making borrowing cheaper can lead to more spending. Increased spending can stimulate economic growth.

What does this all mean for you?

Some debts, like credit card bills, will become a bit cheaper.

Mortgages

Crucially for anyone soon to re-fix their rate, this means mortgage costs are falling.

Already, the typical two and five-year fixed rate deals are coming down, according to data from financial information company Moneyfacts.

Please use Chrome browser for a more accessible video player

Trump’s tariffs: What you need to know

After weeks where the average rate would fall only once or twice, there have been larger and daily falls, the data shows.

As of Thursday, the typical rate for a five-year deal is 5.14%, and 5.29% for the average two-year fixed mortgage.

If the interest rate expectations remain, by the end of the year, the average two-year fixed mortgage rate will fall to 4.3% if a person is borrowing 75% of the property’s value, according to analysts at Pantheon Macroeconomics.

Filling up your car

Another positive that’s motivated by a negative is the reduced fuel cost to the motorist of filling up their vehicle.

The oil price fell due to rising fears of a recession in the world’s biggest economy. Now that those concerns have somewhat subsided, the oil price has remained comparatively low at $63.75 for a barrel of the benchmark Brent crude.

It’s far below the average price of $80 from last year.

This lower cost is likely to filter down to cheaper prices at the pump within days as the sharp oil price drops hit at the end of last week.

Lower oil costs could help bring down costs overall, lowering inflation, as oil is still used in many parts of the supply chain.

👉 Listen to Sky News Daily on your podcast app 👈

Savings

Lower interest rates mean falling savings rates, so savers can expect to get less of a return in the coming months.

Anyone with a stocks and shares ISA (Individual Savings Account) is likely to get a shock when they see the decline in their returns.

A display shows the sharp rising of the Nikkei average stock price on the rebound in Chuo Ward, Tokyo on April 10, 2025. U.S. President Donald Trump announced that it would suspend the "reciprocal tariffs" imposed on the 9th for 90 days, causing a sharp rebound after the previous day's sharp drop. ( The Yomiuri Shimbun via AP Images )
Image:
A display shows the sharp rise of the Nikkei stock index in Tokyo. Pic: AP

Holidays

It’s not the best time to be heading off on a trip to a country that uses the euro. The pound hasn’t strayed far from buying €1.16, a low last seen in August.

It means your pound doesn’t go as far, as you’re getting less euro.

Against the dollar, however, sterling has risen to $1.29.

The exchange rate had been higher in the immediate wake of Mr Trump’s tariff announcement as the dollar value sank. At that point, you could briefly have bought $1.32 for a pound.

Supermarket shopping

Helpfully, the UK’s biggest and most popular UK supermarket, Tesco, updated us that it expects tariffs will have a “relatively small impact”.

Continue Reading

Business

New Look owners pick bankers to fashion sale process

Published

on

By

New Look owners pick bankers to fashion sale process

The owners of New Look, the high street fashion retailer, have picked bankers to oversee a strategic review which is expected to see the company change hands next year.

Sky News has learnt that Rothschild has been appointed in recent days to advise New Look and its shareholders on a potential exit.

The investment bank’s appointment follows a number of unsolicited approaches for the business from unidentified suitors.

New Look, which trades from almost 340 stores and employs about 10,000 people across the UK, is the country’s second-largest womenswear retailer in the 18-to-44 year-old age group.

It has been owned by its current shareholders – Alcentra and Brait – since October 2020.

In April, Sky News reported that the investors were injecting £30m of fresh equity into the business to aid its digital transformation.

Last year, the chain reported sales of £769m, with an improvement in gross margins and a statutory loss before tax of £21.7m – down from £88m the previous year.

More from Money

Like most high street retailers, it endured a torrid Covid-19 and engaged in a formal financial restructuring through a company voluntary arrangement.

In the autumn of 2023, it completed a £100m refinancing deal with Blazehill Capital and Wells Fargo.

A spokesperson for New Look declined to comment specifically on the appointment of Rothschild, but said: “Management are focused on running the business and executing the strategy for long-term growth.

“The company is performing well, with strong momentum driven by a successful summer trading period and notable online market share gains.”

Roughly 40% of New Look’s sales are now generated through digital channels, while recent data from the market intelligence firm Kantar showed it had moved into second place in the online 18-44 category, overtaking Shein and ASOS.

Continue Reading

Business

Coca-Cola brews up sale of high street coffee giant Costa

Published

on

By

Coca-Cola brews up sale of high street coffee giant Costa

The Coca-Cola Company is brewing up a sale of Costa, Britain’s biggest high street coffee chain, more than six years after acquiring the business in a move aimed at helping it reduce its reliance on sugary soft drinks.

Sky News can exclusively reveal that Coca-Cola is working with bankers to hold exploratory talks about a sale of Costa.

Initial talks have already been held with a small number of potential bidders, including private equity firms, City sources said on Saturday.

Lazard, the investment bank, is understood to have been engaged by Coca-Cola to review options for the business and gauge interest from prospective buyers.

Indicative offers are said to be due in the early part of the autumn, although one source cautioned that Coca-Cola could yet decide not to proceed with a sale.

Costa trades from more than 2,000 stores in the UK, and well over 3,000 globally, according to the latest available figures.

It has been reported to have a global workforce numbering 35,000, although Coca-Cola did not respond to several attempts to establish the precise number of outlets currently in operation, or its employee numbers.

More from UK

This weekend, analysts said that a sale could crystallise a multibillion pound loss on the £3.9bn sum Coca-Cola agreed to pay to buy Costa from Whitbread, the London-listed owner of the Premier Inn hotel chain, in 2018.

One suggested that Costa might now command a price tag of just £2bn in a sale process.

The disposal proceeds would, in any case, not be material to the Atlanta-based company, which had a market capitalisation at Friday’s closing share price of $304.2bn (£224.9bn).

At the time of the acquisition, Coca-Cola’s chief executive, James Quincey, said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide.

“Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand.

“Costa gives us access to this market with a strong coffee platform.”

However, accounts filed at Companies House for Costa show that in 2023 – the last year for which standalone results are available – the coffee chain recorded revenues of £1.22bn.

While this represented a 9% increase on the previous year, it was below the £1.3bn recorded in 2018, the final year before Coca-Cola took control of the business.

Read more from Sky News:
TikTok puts hundreds of UK jobs at risk
Consumer confidence at highest point this year

Coca-Cola has been grappling with the weak performance of Costa for some time, with Mr Quincey saying on an earnings call last month: “We’re in the mode of reflecting on what we’ve learned, thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the Costa business successfully.”

“It’s still a lot of money we put down, and we wanted that money to work as hard as possible.”

Costa’s 2022 accounts referred to the financial pressures it faced from “the economic environment and inflationary pressures”, resulting in it launching “a restructuring programme to address the scale of overheads and invest for growth”.

Filings show that despite its lacklustre performance, Costa has paid more than £250m in dividends to its owner since the acquisition.

The deal was intended to provide Coca-Cola with a global platform in a growing area of the beverages market.

Costa trades in dozens of countries, including India, Japan, Mexico and Poland, and operates a network of thousands of coffee vending machines internationally under the Costa Express brand.

The chain was founded in 1971 by Italian brothers Sergio and Bruno Costa.

It was sold to Whitbread for £19m in 1995, when it traded from fewer than 40 stores.

The business is now one of Britain’s biggest private sector employers, and has become a ubiquitous presence on high streets across the country.

Its main rivals include Starbucks, Caffe Nero and Pret a Manger – the last of which is being prepared for a stake sale and possible public market flotation.

It has also faced growing competition from more upmarket chains such as Gail’s, the bakeries group, which has also been exploring a sale.

Coca-Cola communications executives in the US and UK did not respond to a series of emails and calls from Sky News seeking comment on its plans for Costa.

A Lazard spokesperson declined to comment.

Continue Reading

Business

TikTok puts hundreds of UK jobs at risk

Published

on

By

TikTok puts hundreds of UK jobs at risk

TikTok is putting hundreds of jobs at risk in the UK, as it turns to artificial intelligence to assess problematic content.

The video-sharing app said a global restructuring is taking place that means it is “concentrating operations in fewer locations”.

Layoffs are set to affect those working in its trust and safety departments, who focus on content moderation.

Unions have reacted angrily to the move – and claim “it will put TikTok’s millions of British users at risk”.

Figures from the tech giant, obtained by Sky News, suggest more than 85% of the videos removed for violating its community guidelines are now flagged by automated tools.

Meanwhile, it is claimed 99% of problematic content is proactively removed before being reported by users.

Executives also argue that AI systems can help reduce the amount of distressing content that moderation teams are exposed to – with the number of graphic videos viewed by staff falling 60% since this technology was implemented.

More from Money

It comes weeks after the Online Safety Act came into force, which means social networks can face huge fines if they fail to stop the spread of harmful material.

The Communication Workers Union has claimed the redundancy announcement “looks likely to be a significant reduction of the platform’s vital moderation teams”.

In a statement, it warned: “Alongside concerns ranging from workplace stress to a lack of clarity over questions such as pay scales and office attendance policy, workers have also raised concerns over the quality of AI in content moderation, believing such ‘alternatives’ to human work to be too vulnerable and ineffective to maintain TikTok user safety.”

John Chadfield, the union’s national officer for tech, said many of its members believe the AI alternatives being used are “hastily developed and immature”.

He also alleged that the layoffs come a week before staff were due to vote on union recognition.

“That TikTok management have announced these cuts just as the company’s workers are about to vote on having their union recognised stinks of union-busting and putting corporate greed over the safety of workers and the public,” he added.

Under the proposed plans, affected employees would see their roles reallocated elsewhere in Europe or handled by third-party providers, with a smaller number of trust and safety roles remaining on British soil.

The tech giant currently employs more than 2,500 people in the UK, and is due to open a new office in central London next year

A TikTok spokesperson said: “We are continuing a reorganisation that we started last year to strengthen our global operating model for Trust and Safety, which includes concentrating our operations in fewer locations globally to ensure that we maximize effectiveness and speed as we evolve this critical function for the company with the benefit of technological advancements.”

Continue Reading

Trending