Rachel Reeves insiste que o governo tem o plano econômico certo após o crescimento do Reino Unido superar as previsões em março

Time to wrap up….

The chancellor has seized on official figures showing the UK economy was more resilient than feared at the start of the Iran war as evidence to keep the current Labour leadership in place.

Rachel Reeves hailed the fact that the economy unexpectedly grew in March, during the first month of the Iran war, as proof the government has “the right economic planâ€.

“Now is not the time to put our economic stability at risk. To do so would leave families and business worse off,†Reeves said, in a barbed reference to the in-fighting within the Labour party as Keir Starmer fought to hang on to his job.

Figures from the Office for National Statistics (ONS) showed growth of 0.3% in gross domestic product (GDP) in March – significantly better than economists' forecasts that GDP would shrink by 0.2%.

Economists, though, warned that this might be as good as it gets for the UK economy this year, as the Iran war pushed up energy prices and disrupts supply chains.

Here's the full story:

And our analysis:

In other news….

• British government borrowing costs have hit a three-day low after health secretary Wes Streeting resigned, but didn't trigger a leadership contest against Keir Starmer.

  Ten-year gilt yields are down 5 basis points down on the day at 5.01%, their lowest since May 11, while 30-year yields are also down 5bs at a three-day low of 5.69%.

• Traders have been shorting the pound this week, as the Labour leadership battle has gripped the markets.

• Food ingredients firm Tate & Lyle has received a takeover approach, lifting its shares by over 40%.

• Jaguar Land Rover has reported a 99% drop in profits.

• Britain's competition watchdog is examining Microsoft's position in the business software market

Jaguar Land Rover annual profit slumped by more than 99% as it counted the cost of US tariffs and a cyber-attack that disrupted its factories for months.

Britain's largest carmaker made only £14m in profit before tax and exceptional items in the year to March, down from £2.5bn the year before, according to financial results published on Thursday.

The manufacturer, which employs 33,000 people in the UK, suffered a series of blows as Donald Trump's automotive industry tariffs caused turmoil in its important export market.

That was followed by a damaging cyber-attack on the last day of August that forced the company to shut down most of its systems and factories for weeks, with disruption rippling on through the autumn.

Over in the US, more Americans are filing claims for jobless support.

The number of ‘initial claims' for unemployment insurance jumped by 12,000 last week to 211,000.

That's still a low figure in historic terms, but also suggests more US companies cut staff last week, as the Iran war causes spillover effects across economies.

Nancy Vanden Houten, lead US economist at Oxford Economics, says:

“In the week ended May 9, initial jobless claims rose 12,000, a bit more than expected, although claims are still at relatively low levels. We can't say for certain, but the closure of Spirit Airlines may have boosted claims, with Florida seeing the largest increase in unadjusted terms.â€

Tate & Lyle, the food ingredients business, has become the latest UK company to receive a takeover approach.

US rival Ingredion Incorporated has proposed a possible cash offer valuing Tate & Lyle at 595p per share plus 20p of dividends.

Tate & Lyle says this proposal – which I think is worth £2.7bn – follows a number of earlier approaches from Ingredion, and the two sides are now discussing it.

Shares in Tate & Lyle have jumped by 44% to 540p.

Although synonymous with sugar and golden syrup, Tate & Lyle is actually an ingredients operation these days, making sweeteners, starches and food stabilisers for drinks, dairy products, soups, bakery goods and confectionary.

Wes Streeting's resignation suggests “everything seems to be aligning for a leadership contest that will unease bond investorsâ€, reports Neil Wilson, investor strategist at Saxo UK.

Although Streeting has not launched a challenge himself, his call for “the best possible field of candidates†to assemble could be a call for Andy Burnham to return to parliament, should a seat be found for the Manchester mayor.

Wilson writes:

My feeling is that this is the denouement of the plotting and the beginning of the endgame for Starmer. As previously stated, a leadership vote would tend to raise gilt yields, and I think we have to contend now with structurally higher rates for a while…

How could it end well? If Streeting gets the 81 votes, secures the premiership and keeps Rachel Reeves as Chancellor there is a path to thread that is market positive, but otherwise things are looking tricky for gilts.

There's drama in Westminster, where health secretary Wes Streeting has just resigned and called for a leadership battle.

In a letter to Keir Starmer, Streeting says he has “having lost confidence in your leadershipâ€, citing the scale of the defeat in last week's local elections, the government's unpopularity, and accusing the PM of failing to provide a vision.

Urging the PM to start a leadership contest, Streeting writes:

It is now clear that you will not lead the Labour Party into the next general election and that Labour MPs and Labour Unions want the debate about what comes next to be a battle of ideas, not of personalities or petty factionalism. It needs to be broad, and it needs the best possible field of candidates. I support that approach and I hope that you will facilitate this.

UK bonds are holding onto their earlier gains, though – probably because Streeting has not triggered a leadership battle. The yields on 10- and 30- year bonds now down around 5 basis points, meaning the cost of borrowing remains slightly lower today.

The UK stock market has posted gains so far today, after the better-than-expected GDP report this morning.

The domestically-focused FTSE 250 index of medium-sized companies is up 0.85% this morning.

The blue-chip FTSE 100 of the largest companies listed in London is up 0.4%.

Top riser is Legal & General (+6%), the UK insurer and asset manager, after the Financial Times reported today that private capital rivals are circling the business, and have been crunching the numbers on a potential bid.

UK government borrowing costs are continuing to drop today, as investors await developments in the Labour Party leadership tussle.

The latest word from Westminster is that health secretary Wes Streeting is locked in a standoff with No 10, with his allies claiming he had the numbers to launch a leadership challenge but still hoped Keir Starmer would resign.

Streeting would need the backing of the 81 MPs required to launch a formal contest; my colleague Jessica Elgot reports that a source close to Streeting said he had the numbers but “things are shiftingâ€.

In the meantime, UK government bond prices are rising. This has pulled the yield (or interest rate) on 30-year gilts down by 5 basis points (0.05 of a percentage point) to 5.69%, away from the 28-year high of 5.81% set earlier this week as pressure on Starmer heightened.

Ten-year bond yields are also down around 5bps to 5.02%.

Shares in Nvidia are up 1.5% in premarket trading, after the US gave the chipmaker permission to sell its second-most-powerful AI hip to 10 Chinese countries.

Trade war news: The US has cleared around 10 Chinese firms to buy Nvidia's second-most powerful chip in a move that could clear the way for the end of the stand-off over tech rivalry.

China dominates the global supply of legacy chips, the older style chip used in everything from washing machines to smart phones, cars and medical devices.

But it lags behind on advanced chips, designed by the likes of Nvidia, used to drive artificial intelligence learning.

The presence of Nvidia CEO Jensen Huang, who was not originally expected to join Donald Trump's trip, has raised hopes that a tech deal could be still be rescued.

Nvidia dominates the AI chip market, with Mizuho Securities estimating the company supply between 70% and 95% of the chips used for training by OpenAI's GPT and others.

Ahead of the summit Trump said he would be asking Xi to “open up†China to allow their “brilliant people†to “work their magic, code for permission to allow US trade companies enter the Chinese market.

Earlier this year three people were charged in the US with trying to unlawfully divert cutting edge US AI tech to China, a sign of the Chinese hunger to compete on AI.

Before the summit, experts said Washington could loosen its export restrictions on AI tech but it was more like it could seek to increase restrictions to gain advantage over China and cement its AI lead over Beijing.

Britain's competition watchdog has launched an investigation into Microsoft powerful position in the business software market.

The Competition and Markets Authority will examine whether Microsoft should be designated with “strategic market status†(SMS), given the wide use of products such as Windows, Word, Excel, and Teams, as well as its AI offering, Copilot.

The investigation will examine whether Microsoft has SMS in business software and consider whether it can use that position to limit customer choice. It will also examine if the bundling of the products together makes it harder for customers to switch to other software.

It will also examine if AI competitors are able to integrate with Microsoft's business software.

Sarah Cardell, chief executive of the CMA, says:

Business software is a cornerstone of how the UK economy functions, from small businesses to major public services and infrastructure. Hundreds of thousands of customers in the UK rely on Microsoft's systems, which is why it's so important to ensure these services are delivering good outcomes.

Microsoft has said it is committed to working “quickly and constructively†with the CMA on this issue.

This chart shows how UK growth in January-March was the strongest for a calendar month in a year:

It also illustrates the earlier point that the ONS may be over-estimating growth early in the year….