Business News Live – Monday 14 July

Good day and welcome to our vibrant week of business updates on The Independent’s rolling live blog. This week promises a flurry of activity from stock market reactions to UK inflation data, beginning with notable shifts in the money markets. The pound, unfortunately, is in decline, yet Bitcoin continues its ascendancy.

Bitcoin Hits New Heights

Bitcoin, that digital darling of the financial world, is on the rise. It has surged 30% this year, with an impressive 15% rise just this month. Last week alone saw a near 10% increase. Overnight, it achieved a new pinnacle, reaching roughly $122,450. Presently, it appears to be holding steady above the $122,000 threshold. A year on, it has practically doubled, marking a 100.9% increase.

European Stocks Tumble Post-Tariff Announcement

In the wake of the US announcing a 30% tariff on EU and Mexican imports slated for 1 August, European indices have notably suffered. Germany’s DAX fell by 0.8% and France’s CAC 40 by 0.65%, while the Euro took a slight hit against the US dollar. Yet, amidst this turmoil, the FTSE 100 ascended, inching up 0.2% due to the UK’s separate tariff agreements with the US, including a baseline 10% rate and select exemptions.

The UK’s Trade Advantage

AJ Bell’s investment analyst Dan Coatsworth posits that British firms possess an edge over their European counterparts this summer. While tariff speculations have characteristically shaken markets, the UK, thanks to its established 10% tariff pact with the US, is trading from a position of relative certainty. This advantage could potentially entice foreign investments into UK-based manufacturing and logistics facilities.

EU’s Proposed Retaliation

With talks of retaliatory measures against the US tariff, the EU seems poised to respond robustly. Italy’s foreign minister, Antonio Tajani, hinted at plans to impose tariffs on €21bn (£18bn) worth of US goods, asserting that tariffs negatively affect everyone, starting with the Americans themselves.

Denmark’s Bold Statement

Denmark’s foreign minister, Lars Lokke Rasmussen, emphasised the need for the EU to ‘prepare for war’ regarding US trade negotiations. While countermeasures are not on the table just yet, the EU is bracing itself for all eventualities.

EU’s Strategic Response

European Commission president Ursula von der Leyen revealed that the EU will defer its countermeasures until any US tariffs are enacted. The extension aims to foster a negotiated solution, while simultaneously ensuring the EU remains primed for responsive action.

Bank of England’s Possible Rate Cut

In monetary news, the Bank of England’s Andrew Bailey recently suggested potential adjustments to interest rates, currently at 4.25%. The conversation hinges on inflation, stuck at a stubborn 3.4%. The BoE is contemplating a careful and measured reduction, as firms adjust expenses across the labour market.

Stay tuned for more updates as we march through this lively week of financial developments.