China cresce a uma das taxas mais baixas registradas; a Thames Water tem fundos para sobreviver até o final do ano

Exclusive: The Bank of England governor has said he would have put off a meeting with Nigel Farage last autumn had the Reform UK leader's £5m gift from a crypto billionaire been under investigation at the time, reports our banking correspondent Kalyeena Makortoff.

Andrew Bailey said he did not regret meeting Farage to discuss the Bank's plans for cryptocurrency regulation last September, months before the controversial donation from the Thailand-based investor Christopher Harborne was revealed by the Guardian in April.

However, Bailey said he would have considered delaying the meeting had the central bank known what it knows today: that a parliamentary inquiry would be launched over the undisclosed gift from Farage's wealthy benefactor, who has made a large part of his estimated £18bn fortune from crypto.

In an interview with the Guardian, Bailey said:

Whether I would have then said: ‘Well, I think we'd better wait until the investigation is done before we have the meeting' – I think that would be a judgment we would have taken at the time.

It would have been a material fact, certainly, in our judgment.

Bailey, who also serves as head of the international watchdog the Financial Stability Board, has previously assured that he is “able to spot†and resist lobbying and did not bow to Farage.

Farage has said he used the meeting in September to demand the Bank of England drop plans for a state-issued rival to a stablecoin issued by Tether. Harborne, who has provided two-thirds of Reform UK's funding, appears to make as much as £1bn a year from his shareholding in Tether.

Stablecoins are cryptocurrencies whose value is typically pegged to an asset or a currency such as the US dollar and tend to be used as an intermediary between state currency and crypto transactions.

We'd like to find out more about how people in the UK are using prediction markets and what has attracted them to these platforms.

Prediction markets allow people to buy and sell contracts based on the outcome of future events, such as sporting tournaments, elections and financial markets. They have become increasingly popular in recent years, particularly in the US.

We'd like to hear confidentially from people in the UK who have used prediction markets, whether to trade on the World Cup, elections, financial events or something else.

What attracted you to prediction markets? How did you first hear about them? How do you think they compare with traditional betting or investing? We are also interested in the practicalities. How easy was it to access a prediction market from the UK? Did you encounter any difficulties or concerns? If you've traded on the World Cup, we'd like to hear how your experience compared with other ways of placing a bet.

Britain's biggest housebuilder Barratt Redrow announced a £400m return to shareholders today via a £386m share buyback and £14m dividend, as reported earlier. Phoenix Asset Management had been publicly campaigning for a change in the allocation of capital.

A Barratt shareholder for more than two decades, Phoenix publicly called on the board to pursue a more aggressive share buyback programme on 29 June. A number of other investors then got in touch with the investment firm to voice their support for the proposal, and it also talked to the Barratt board.

Today, Phoenix welcomed the buyback and the switch from dividends to repurchases.

Gary Channon, chief investment officer and founder of Phoneix said:

The board's decision to return capital through buybacks, while the shares trade so far below their worth, is a step forward for shareholders. Every share bought back creates lasting value for those who remain. We remain of the view that the quantum should be based upon cash generation and not constrained by accounting earnings. We look forward to continuing to engage with the board.

The Barratt share price is the second-biggest riser on the FTSE 100 index this morning, up 2.7%% at 285.6p, but has lost a quarter of its value over the past year.

As reported earlier, government bond yields have eased since the surprise cooling in US inflation on Tuesday, which led to interest rate hike expectations being scaled back.

The yield, or interest rate, on the 10-year UK bond, known as gilt, shot up above 5% on Tuesday, and is now at 4.976%, up 2 basis points on the day. However, it remains high, indicating higher borrowing costs for Andy Burnham's incoming government.

On one side: lenders who perhaps didn't always want to acknowledge that they had harmed consumers and have been seeking to minimize the compensation. And the other side: a claimants management ecosystem, which is largely seeking, I think, to generate as much profit as they can.

Meanwhile, he raised concerns about the claims law firms and claims management companies (CMCs) who gather consumer information to pursue claims against banks and specialist lenders on their behalf:

We are concerned about the integrity of the claims management market, the ecosystem, and that is everything from lead generators who secure referrals for law firms or claims management companies, the claims management companies and law firms and some of their conduct, and indeed those who fund and ensure that activity.

He has now called for more stringent rules in place to monitor their finances:

One of the things that the Civil Justice Council recommended was, at the very least for those who fund high volume consumer claim activity – whether that's CMC's or law firms – they should at least be subject to money laundering registration with the FCA. We would support that. And we think, at the very least, that should now move forward as quickly as possible.

Here is our full story on Thames Water:

Last week, we reported that ministers are drawing up plans to set legally binding debt targets for England's water companies as they look for ways to avoid another corporate failure such as Thames Water.

More on China's slowdown, which has caused a sell-off of mining shares in London, amid expectations that the country will need fewer raw materials.

Fresnillo is the biggest faller on the FTSE 100 index, down 3.2%, while Endeavour Mining and Antofagasta are also down, by 2.3% and 2.1% respectively.

As a reminder, China's economy expanded at its slowest pace in more than three years in the second quarter, missing forecasts, with weak household spending partly offsetting strong manufacturing and exports.

Gross domestic product growth slowed to 4.3% between April and June from the first quarter's 5%, landing below ​the lower end of China's 4.5% to 5% full-year target.

The data adds pressure on Beijing to deliver more stimulus. But many analysts say a closely watched meeting of the Communist Party's Politburo, a top decision-making body, at the end of this month may not make any big announcements because of concerns over ballooning debt.

Economists argue the bigger challenge â is not the pace of growth, but its composition.

Wednesday's data showed retail sales rising 1% in June and industrial output expanding 5.3% — showing China's reliance on global demand for manufactured goods at a time when trading partners are complaining, and the Iran war weighs on the world economy. Investment is slowing in China.

Jane Hou, who runs a European goods importing business in eastern China, â told Reuters that her income has roughly halved since the beginning of the year as her firm's sales have dropped. An apartment she rents out has been without a tenant for more than six months, a reflection of China's huge housing oversupply ​and prolonged property crisis.

Hou said:

Apart from necessary spending on food, I save on anything I can. I haven't ‌bought a single piece of clothing in six months.

However, the economy ‌grew 4.7% in the six months to June, within target, reducing the urgency for major stimulus. Morgan Stanley cut its full-year economic growth forecast to 4.6% from 4.8%.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, doubts the Politburo will signal ‌big spending decisions, given that exports remain strong for now.

The government seems reluctant to spend fiscal resources and build up debt.

There is a general consensus among policymakers and researchers that China needs to boost domestic demand. But there is no consensus how to do it.

The UK discount chain B&M's sales performance worsened considerably in the past three months, dealing a heavy blow to its turnaround efforts.

Like-for-like sales (at outlets open at least a year) fell 2.3% year on year in the 13 weeks to 27 June, its first quarter, worse than the 0.1% and 0.6% declines in the previous two quarters.

The shares dropped 5.7% and were the worst performer on the FTSE 250.

The retailer, which sells products ranging from food and household essentials to toys and garden items, ‌reported total group revenue of £1.43bn in the quarter, up 2% on a year earlier.

One of â Britain's largest discount retailers, B&M usually benefits when households come under ‌pressure as shoppers trade ‌down. However, the weak performance underscores the challenge faced by its boss.

Tjeerd Jegen, the chief executive, said,

Our first quarter is our seasonally most variable for sales, and the previously mentioned slower start to our garden season against a very strong comparable last year made this especially so in Q1. Against this backdrop, the like-for-like sales decline at B&M UK was expected, but it was pleasing to see our general merchandise categories return to growth in May and June, and our garden and outdoor inventories ending the season at normal stock levels.

Last year, the variety store and garden chain benefited from “unusually early warm and dry weather†which in a 10.9% jump in like-for-like sales.

France fared better, with ​4.6% revenue growth to £156m, with like-for-like sales accelerating to 5.3% from 1.7% in the fourth quarter, driven by higher footfall in its stores.

B&M is pushing on with its “Back to basics B&M plan†to improve efficiency and run better promotions, sharpen prices and clear old inventory.

Dan Coatsworth at AJ Bell said:

B&M is still wading through mud, putting in a lot of effort for limited progress.

The UK is to blame with a sluggish performance, not helped by B&M cutting prices to stay competitive with fast moving consumer goods. That puts greater emphasis on making this a volume game, shifting as many products as possible rather than prioritising profitable sales.

B&M is a discount retailer, and its business model is a ‘pile ‘em high, sell ‘em' cheap one, but the margin pressure from price cuts is still something to watch.

France might have been kicked out of the World Cup, but the country was a saving grace for B&M. Its French operations enjoyed decent revenue growth from a mixture of existing and new stores. Unfortunately, France is only a small part of the group and what happens in the UK is ultimately what moves the dial for the share price.

Investors are displeased with the overall performance, sending the shares down. Contrarian investors might like the cheap valuation at B&M, but it continues to be a waiting game for the share price to regain the strength it once enjoyed.

Dan Coatsworth, head of markets at the investment platform AJ Bell, said:

After years of miserable share price performance, it looks like PayPal could be put out of its misery as a standalone company.

The payments sector has long been a hive of activity for takeover activity, and one must wonder why PayPal hasn't already been picked off. Spun out of Ebay, the payments group was merrily on its way to greatness when suddenly Apple Pay and Google Pay took off and grabbed some of PayPal's market share.

PayPal has tried many things to fight back but has been left behind in a busy market that has also seen the likes of Stripe, Block and Adyen become credible challengers.

The pandemic triggered an e-commerce boom as people were stuck at home in lockdown and bought items online to relieve their boredom. PayPal enjoyed a purple patch, but it didn't last.

If the bid rumours are true, Stripe and Advent obviously see an opportunity to buy a company that's down but not out.

The brand still has considerable trust among the public and business community, and it makes a decent profit. It is plugged into many of the hot payment themes including mobile payments, digital wallets and buy now, pay later. For Stripe, it provides a consumer-facing brand.

Importantly, PayPal is dirt cheap. At its peak, the shares traded on more than 60 times earnings. They're now on less than nine times which is the sort of rating that's rarer than hen's teeth in the payments sector.

The American-Irish payments company Stripe and the US private equity firm Advent International have swooped on PayPal with a joint offer to acquire it for around $53bn, Reuters is reporting.

The pair are offering to pay $60.50 a share. The offer, submitted earlier this ​month, is backed by about $50bn in committed financing from banks, Reuters said.

The proposal follows an initial approach made in early April, but Stripe and Advent have not received a response from PayPal, which is based in California, and are seeking to advance discussions in the coming weeks.

Under the proposal, Stripe and Advent would jointly own PayPal, with each holding an equal stake, rather than breaking up the company.

PayPal shares were last up 15% in ‌pre-market trading.

Founded in the late 1990s, PayPal ‌was an early player in digital payments, but has faced mounting competition as rivals such as Apple Pay and Google Pay have gained ‌market share. It has spent the past several years struggling with slowing growth, which wiped out much of the value it gained during the pandemic.

Britain's largest â homebuilder Barratt Redrow hopes to keep shareholders sweet by setting out plans to return £400m to them, as it delivered home completions at the top end of its range.

The company said ‌it completed 17,667 homes in the year to 28 June, ‌slightly ahead of market expectations. This includes 3,774 affordable homes. In the next 12 months, it hopes to deliver 17,700 to 18,200 properties.

To attract customers, Barratt has been offering higher incentives since last autumn and part-exchange, which it said has been a “powerful sales toolâ€.

The average selling price was £352,000, versus £344,200 the previous year.

Barratt expects “minimal†house price inflation, alongside build cost inflation of 3% â to 4% this year, reflecting rising energy prices due to the Iran war ‌and a slowdown in activity across the wider industry.

Its forward sales dipped slightly to 9,728 homes from 9,835 a year earlier.

However, the firm said it would return £400m to investors, mainly through a share buyback but also including a £14m dividend.

The news boosted the company's share price, up nearly 2% and one of the biggest gainers on the FTSE 100 index this morning, along with rival Persimmon. Other housebuilders, such as Galliford Try, Vistry Group and Bellway also rose, all listed on the FTSE 250, along with construction company Kier Group.

There has also been speculation that Andy Burnham, who is poised to take over from Keir Starmer as prime minister, could revive the help to buy scheme.

David Thomas, the outgoing chief executive, said:

Barratt Redrow has delivered a solid performance in a challenging market, completing 17,667 homes and generating adjusted profit before tax in line with market expectations.

Despite continued improvements in mortgage availability this year, consumer sentiment remained cautious particularly after the start of the conflict in the Middle East, with heightened macro uncertainty, and the corresponding risks around inflation, driving mortgage rates higher, continuing to pressure affordability.

He said Redrow has been successfully integrated and £73m of the targeted £100m cost savings have been achieved. Management is looking to make further cost savings. Barratt acquired its smaller rival two years ago in a £2.5bn deal.

Thomas will hand over to the new CEO, Dean Banks, on 21 September. He has been running the infrastructure company Ventia Pty since 2021, and also worked at the infrastructure group Balfour Beatty and the banknote printing firm De La Rue.

Barratt is among seven major UK housebuilders who face a £4.5bn class action lawsuit over claims that they colluded to inflate house prices.

European stock markets are a sea of red.

The FTSE 100 index in London has fallen 82 points, or 0.78%, to 10,446. Germany's Dax has tumbled 1% while France's CAC lost 0.3%, Italy's MiB slid 0.7% and Spain's Ibex lost almost 1%.

Brent crude is pushing higher again, up 1.5% to $86 a barrel, as the situation in the Middle East worsens. The US has struck Iran for a fourth consecutive day while Iran responded with attacks on US bases in the Gulf.

Its deputy foreign minister said Donald Trump's decision to renew the US blockade on Iranian shipping “has, in a way, dismantled the Islamabad memorandumâ€.

The pound has edged higher against the US dollar this morning, up 0.1% at $1.3406.

The dollar has been on the backfoot since the lower-than-expected US inflation number of 3.5% for June was released on Tuesday, which prompted traders to dial back their rate hike expectations.

Chris Turner, head of global markets at ING, said:

The market was building a conviction that the Fed was going to hike in September and it's certainly injectetd a bit of doubt into that now.

The Dutch tech giant ASML, which manufactures chip-making machines to power the tech industry, has raised its sales forecasts for the second time this year after strong demand for AI systems, and reported higher second-quarter profits.

The company's share price jumped 5.7% on the news.

ASML is a critical cog in the global economy and a key bellwether for the tech sector, as everything from smartphones to missiles rely on the semiconductors crafted with its tools.

Investors were watching the results closely after several share sell-offs in the global tech sector over fears the AI bubble could be about to burst.

But the firm's chief executive Christophe Fouquet said AI is still driving his business.

Ongoing AI-related investments and continued progress in AI technologies are driving demand for advanced logic and memory chips, further strengthening the semiconductor industry's growth outlook.

Our order intake remained extremely strong in the first half of the year.

The company, Europe's biggest by market capitalisation, now expects to make between €43bn and €45bn in net sales this year, up from the previous range of €36bn to €40bn.

Sales climbed to €9.3bn in the second quarter from €7.7bn a year earlier. Net profits were also better than expected, rising to €2.9bn from €2.3bn a year earlier.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, has looked at the results.

ASML has delivered another statement quarter, with sales and profitability both ahead of guidance and the full-year outlook lifted by much more than the market expected. The biggest surprise came from customers upgrading and servicing equipment already on factory floors, a sign that chipmakers are pushing existing capacity while preparing for the next wave of investment. But this is more than a short-term scramble. AI demand is pulling investment forward across both advanced computing and memory chips, giving ASML clearer sight of customer demand well beyond this year.

The story has now shifted from whether demand will arrive to whether ASML can expand production fast enough to meet it. Management is responding with ambitious capacity plans, directly addressing one of the main concerns that has been rumbling in the background.

That supports our view that ASML remains one of the clearest ways to gain exposure to the AI infrastructure build-out, thanks to technology that the world's leading chipmakers simply cannot replace. ASML now needs to convert a powerful order pipeline into system deliveries, revenue and profit – scaling production without losing control of costs.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

China grew 4.3% in the quarter to 30 June, one of the slowest rates on record, as sluggish domestic demand outweighed a surge in exports.

Growth slowed from the first quarter rate of 5%, and was the lowest in three and a half years. It was less than economists had forecast, and below Beijing's 4.5% to 5% target range.

Thames Water said this morning that it has enough funding to survive until the end of this year. It is scrambling to put together a rescue recapitalisation plan with creditors, regulators and the government, to stave off temporary nationalisation.

Britain's biggest water company has £515m of cash in the bank, according to its annual report.

The company, which serves 16 million customers in London and southern England, has become a symbol of failure in Britain's privatised water sector, polluting rivers and the sea with sewage due to ageing infrastructure, and struggling under a massive debt pile. It said its debts grew by £1.7m from last year, to £18.5bn.

In recent weeks, the environment secretary, Emma Reynolds, objected to a £10bn rescue proposal for the company put foward by 100 institutional investors to the industry regulator Ofwat, saying it would place an “undue burden†on consumers.

Andy Burnham, who is expected to become the UK's new prime minister on Monday, has said he believes public ownership is the best option for Thames Water. The government was already looking at taking Thames Water into its Special Administration Regime, a form of temporary public ownership.

However, Thames said its performance is improving. Sewage pollution fell 18% in the 12 months to the end of March, and its underlying profit after tax jumped to £203.9m, from £12.6m last year.

Chief executive Chris Weston said:

While operationally the business is improving, we are also working with our creditors, regulators and government to complete our recapitalisation.

In financial markets, oil prices have increased modestly, after the US ditched a plan to charge a 20% fee on cargo transiting through the strait of Hormuz. But Donald Trump ratcheted up the rhetoric, threatening to expand US strikes on Iran next week to target power plants and bridges if Tehran does not agree to a deal.

Brent crude rose 0.7% to $85.3 a barrel, after climbing above $86 a barrel on Tuesday amid escalating tensions in the Middle East.

Asian stock markets mostly rose and government bonds steadied, after a bigger-than-expected cooling in US inflation on Tuesday prompted markets to scale back expectations for interest rate hikes.

Japan's Nikkei rose 1.5% and Hong Kong's Hang Seng climbed 1.4%, while South Korea's Kospi, which took a hammering earlier in the week, bounced back 6.2%.

Bond yields and the dollar fell amid relief over the inflation reading. The pound rose 0.45% against the dollar and the euro was above $1.14 while two-year Treasury bonds (which are particularly sensitive to rate expectations) fell 9 basis points to 4.2% from Tuesday's 17-month high of nearly 4.3%.

However, US Federal Reserve chair Kevin Warsh told Congress on Tuesday that one data point was not enough to declare victory over inflation.

Also contributing to optimism, Netherlands-based ASML, Europe's most valuable company and the world's biggest supplier of chip-making equipment, has beaten revenue forecasts.

The Agenda

• 10am BST: Eurozone industrial production for May

• 1.30pm BST: US producer prices for June

• 2.45pm BST: Bank of Canada interest rate decision

• 3pm BST: US Federal Reserve chair Kevin Warsh testifies before Senate banking committee

• UK Treasury annual report and accounts TBC