Business information stay: Oil costs drop sharply as ceasefire introduced, FTSE 100 opens increased

Oil industry group Offshore Energies UK (OEUK) chief executive David Whitehouse has said businesses are happy to see the de-escalation of tensions in the Middle East and pointed to lowering prices as a positive.

Speaking on BBC’s Good Morning Scotland radio show, Mr Whitehouse said: “Events in the Middle East are of global significance.

“There’s a real human element to that, there’s many people from Scotland working in the Middle East because of our domestic oil and gas sector.

“A volatile situation – I think people have been pleased to hear the news overnight of a ceasefire.

“It’s true the Strait of Hormuz carry approximately 20% of the world’s oil and gas supplies, and disruption there would be significant.

“But oil prices have actually remained relatively stable and we’ve seen a reduction overnight.”

Grocery prices are now 4.7% more expensive than a year ago as supermarket inflation hit its highest level since last March, figures show.

The figure is up from 4.1% last month, which was a rise from 3.8% in April, according to data from analysts Kantar.

Price rises did not stop British consumers from making 490 million trips to the supermarket over the last month, averaging almost 17 per household and the highest recorded by Kantar since March 2020.

The increase in visits saw take-home grocery sales over the four weeks to June 15 grow by 4.1% compared with the same period last year.

However, the rise in the frequency of visits was balanced out by a drop in average amount spent per trip, which fell by 3p to £23.89.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Supermarkets and grocery brands are entering new territory as weight loss drugs become more popular, with four in 100 households in Great Britain now including at least one GLP-1 user.

“That’s almost twice as many as last year, so while it’s still pretty low, it’s definitely a trend that the industry should keep an eye on as these drugs have the potential to steer choices at the till.

“Four in five of the users we surveyed say they plan to eat fewer chocolates and crisps, and nearly three quarters intend to cut back on biscuits.”

Meanwhile, consumer concerns over price are continuing, with sales of own label ranges growing 4.2% this month ahead of branded lines as shoppers looked to balance their budgets.

Brent Crude Oil, seen as a global benchmark of prices, has dropped 4.95 per cent, sitting back under $68 a barrel having been $77-78 for much of Monday and as high as high as $80 over the weekend.

The drop back to March price levels is a notable falloff, not just in actual price but in fears of further escalation, with some analysts estimating this week that oil prices could have soared beyond $100 in the event of Iran partially or temporarily closing off the Strait of Hormuz.

Oil is still steady at just under $69, so no immediate off-the-charts reaction to Israel’s suggestion the ceasefire has been breached.

Even so, markets will remain cautious – but as always, they are forward-looking too, as AJ Bell’s investment director Russ Mould reminds us.

What next, is always the question?

“The markets will be watching closely to see if the cessation in hostilities is maintained and for Iran’s next move – amid noises from that side that no such ceasefire has been agreed.” Mr Mould said.

“Defensive stocks, oil producers and precious metals miners were all under pressure in early trading. Gold slipped back as its safe-haven attributes were less in demand. This rather clipped the wings of the FTSE 100 given its relatively heavy weightings in these areas and saw the index underperform its European counterparts.”

“On the flipside, travel stocks moved higher, both on the implications for fuel costs but also as the potential hit to foreign travel appetite that might have resulted from any further escalation of Middle East tensions seems to have been swerved.

“Attention may switch from geopolitical concerns to the outlook for interest rates as the individuals heading up the US Federal Reserve and Bank of England are set to speak before politicians in their respective countries, with observers alive to any hints about the future trajectory of rates.”

NS&I are reducing the Premium Bonds prize fund rate to 3.6 per cent from August, lowered from 3.8 per cent.

They say the odds of winning remain unchanged at 22,000 to 1.

That’s a direct result of a “changing landscape for savings”, NS&I say.

That’s in spite of the interest rate not changing last week, when the Bank of England opted to hold at 4.25 per cent.

Here’s our roundup for the best rates in savings accounts and cash ISAs, if you’re looking for a new home for your money or if your bank offers you a less-impressive savings rate. (And a guaranteed rate, unlike Premium Bonds.)

Amazon is set to create thousands of new jobs across the UK as part of a substantial £40 billion investment over the next three years, signalling a major expansion of its logistics network.

The technology giant confirmed that a new fulfilment centre in Hull will open this year, generating some 2,000 roles.

Another 2,000 jobs are earmarked for a site in Northampton, scheduled to open in 2026.

Beyond these confirmed locations, Amazon also announced plans for two additional warehouses in the East Midlands, slated for a 2027 opening.

While the precise sites remain undisclosed, these facilities are expected to lead to the recruitment of thousands more positions.

More news here:

Oil prices seem to be rising once more over the past hour, with Brent Crude back up past $69.

Not too much movement just yet, but still one to keep an eye on as Israel is claiming Iran broke the ceasefire and they will “respond forcefully”.

Israel’s defence minister, Israel Katz, has said that he told the military to respond forcefully to Iran’s alleged ceasefire violation with “high-intensity” strikes in the heart of Tehran.

Google may have to launch changes to its search engine in the UK and hand more power back to publishers, the competition regulator has warned.

The Competition and Markets Authority (CMA) has said it is looking at whether it needs to loosen Google’s control of its search engine and allow publishers more influence over how their content is used.

The tech giant is the first company being targeted by the regulator under a new set of digital market laws.

Google accounts for more than 90% of searches in the UK, while it is also used by more than 200,000 UK businesses to reach customers.

Google said it would work “constructively” with the CMA but highlighted that its plans presented “challenges” to the business.

As expected, European stocks are on the rise this morning:

• FTSE 100 up 0.39 per cent
• DAX up 1.83 per cent
• CAC 40 up 1.48 per cent
• Euronext 100 up 1.06 per cent

The British benchmark is the outlier there, but it’s easily explained – oil giants BP and Shell saw their share prices rise over the past few days when oil prices shot up, which in turn saw the FTSE 100 fall far less than the French or German indices did.

Today, though, BP is down 6 per cent and Shell has followed at 4.25 per cent lower, the two biggest fallers in the FTSE 100.

IAG and Easyjet are both flying (hah) again, more than 6 per cent up each.

The FTSE 100 will rise around 0.5 per cent when it opens shortly, as investors greet the news of a ceasefire warmly.

While US stocks won’t open until afternoon as usual, they are also poised for sharp rises.

The S&P 500 is showing a 1 per cent uplift already, with 1.3 per cent for the Nasdaq.