Sterling surged to more than $1.41 as investors celebrated the Scottish National Party’s failure to win a majority in Holyrood’s elections, pushing the prospect of a second independence referendum off the table for now.
The rise of more than 1pc against the dollar to a two-month high was matched by a similar appreciation against the euro meaning the pound is worth more than €1.16.
Nicola Sturgeon’s party won 64 seats in the Scottish Parliament, one short of the 65 needed for a majority, which FX analyst John Hardy at Saxo Bank said means international investors can put referendum fears “in the rearview mirror” and buy more UK assets.
“Clearly the market was concerned the SNP could get an outright majority and this could shorten the timeline to some eventual new referendum campaign,” he said.
“By falling one seat short, the mandate isn't quite there and it sends the whole referendum scenario over the horizon for investors.”
This is combined with a strong economic outlook as well as some wobbles in the US which make the dollar relatively less attractive, strengthening sterling.
Francesco Pesole, an FX strategist at ING, said the fundamental picture is one of a strong economy supporting the pound.
“Hopes of a strong economic rebound continue to be fuelled by the reopening plans in the UK and this should continue to put a floor under sterling,” he said.
At the same time markets reacted badly to Friday’s weak jobs report in the US which saw the unemployment rate creep up to 6.1pc in April, raising fears for the sustainability of the recovery in the world’s largest economy.
Analysts at UBS predict a wider shift away from US assets as the rest of the world recovers, which could push the pound to $1.49 by the end of the year.
A rise on this scale would put sterling back up at a level last seen before the Brexit vote knocked the currency five years ago.
That is all from us today - here are some of our top stories:
Thank you for following along and see you again tomorrow morning!
Tech falls in the US
Tech shares are falling in the US, as rising commodity prices are igniting concerns about whether inflation will derail a growth rebound and spoil a record stock rally.
The tech-heavy Nasdaq fell 1.5pc.
The Dow Jones, meanwhile, rose to a record to top 35,000 for the first time. It was up almost 0.7pc.
The benchmark S&P 500 was little changed, losing 0.1pc.
Make sure you're up to date with all the fresh details on how the roadmap out of lockdown is panning out in our coronavirus live blog. Boris' press conference is ongoing.
Government to sell another 5pc stake in NatWest
The Government is due to sell another 5pc stake in NatWest, taking British taxpayers closer to ending their status as the bank's majority shareholder.
The sale, which starts with immediate effect as of this afternoon's announcement, is expected to be of about 580m shares with the price determined by demand from institutional investors.
It will reduce HM Treasury's holding from just under 60pc, to just under 55pc of the bank. This would mark the Government's lowest stake since it bailed NatWest out for £45.5bn in the autumn of 2008.
Barclays, Citigroup, Goldman Sachs and Morgan Stanley are acting as joint bookrunners.
Shares dived on the news before recouping some losses:
Attorneys general unite against Facebook's 'harmful' plans for under-13s Instagram
Forty-four attorneys general from across the US sent a letter to Mark Zuckerberg today, asking him to abandon plans to create a version of Instagram aimed at children under 13.
The letter, signed by attorneys general from New York and Massachusetts, among others, said:
Facebook has a record of failing to protect the safety and privacy of children on its platform, despite claims that its products have strict privacy controls.
Reports from 2019 showed that Facebook’s Messenger Kids app, intended for kids between the ages of six and 12, contained a significant design flaw that allowed children to circumvent restrictions on online interactions and join group chats with strangers that were not previously approved by the children’s parents.
Just recently, a “mistake” with Instagram’s algorithm promoted diet content to users with eating disorders, where the app’s search function recommended terms including “appetite suppressants” and “fasting” to vulnerable people who were at risk of relapsing.
These alarming failures cast doubt on Facebook’s ability to protect children on their proposed Instagram platform and comply with relevant privacy laws such as the Children’s Online Privacy Protection Act.
A Facebook spokesperson said: “We’ve just started exploring a version of Instagram for kids. We agree that any experience we develop must prioritize their safety and privacy, and we will consult with experts in child development, child safety and mental health, and privacy advocates to inform it.
"We also look forward to working with legislators and regulators, including the attorneys general in the US. In addition, we commit today to not showing ads in any Instagram experience we develop for people under the age of 13.”
London digital freight start-up Zencargo raises £30m
A London start-up that works with Vivienne Westwood, Farfetch and Soho Home has raised £30m to expand rapidly overseas, reports my colleague Laura Onita.
Zencargo, a digital freight forwarder, helps firms to manage and organise their stock more efficiently, especially if there are disruptions to air, sea or land freight services.
External factors such as the impact of Brexit and the pandemic on supply chains globally, as well as the recent the Ever Given crisis on the Suez Canal, have all boosted trade.
“In the past year there have been three or four once-in-a-life time events,” said Alex Hersham, chief executive. “Supply chain agility is a buzzword for a reason. It has tangible bottom line implications for our customers.”
Zencargo will use the cash to grow the team from 150 staff currently to 350 in the next year, invest in technology and expand overseas. It has headquarters in London and is opening offices in the Netherlands and Hong Kong.
The cash injection comes after a $20m (£14m) raise in 2019. Source close to the deal said valued the company at $200m.
The firm expects to make £100m in revenue this year and “more than double that by the end of 2022”. Hersham declined to say if Zencargo was profitable.
Former Scottish Conservative leader Ruth Davidson joins Royal London
Ruth Davidson, the former leader of the Scottish Conservative Party, has joined the board of life insurer Royal London as a non-executive director, reports my colleague Simon Foy.
The appointment comes less than a week after the Scottish parliamentary elections, which Ms Davidson chose not to contest.
She led the Tories north of the border between 2011 and 2019 and was widely credited with boosting the party’s support amid a decline in the popularity of the Labour Party during a tumultuous period in Scottish politics.
Royal London previously hired former pensions minister Steve Webb after he left Government in 2015.
Ms Davidson will take up the role at the pension provider and life insurer from June 8.
Alleged US pipeline hackers say goal was money, not "problems for society"
The hacking group thought to be responsible for the major oil pipe shutdown in the US has reportedly released a statement saying their goal was to get money and not to create problems for society.
The Colonial Pipeline, which carries 2.5m barrels a day, 45pc of the East Coast's supply of diesel, petrol and jet fuel, was hit by a ransomware cyber attack on Sunday forcing it offline.
Boston-based cyber-security company Cybereason discovered the statement on the dark web and said it had been posted by the cyber crime gang DarkSide, which has been tied to the ransomware attack.
"We are apolitical, we do not participate in geopolitics, do not need to tie us with a defined government and look for other our (sic) motives. Our goal is to make money, and not creating a problem for society," the statement said, which was first reported by CNN.
"From today we introduce moderation and check each company that our partners want to encrypt to avoid social consequences in the future."
Copper price surges to all time high
Copper has hit another all time high today, with three-month copper on the London Metal Exchange climbing to $10,747.50 a tonne after breaking a decade-old record on Friday.
So why is copper surging now? Bloomberg has the answers:
It’s partly due to evidence of recoveries in other major industrial economies, with manufacturing output surging in places like the U.S., Germany and Japan.
But investors have also been piling into copper on a bet that global efforts to cut carbon emissions are going to mean the world needs a lot more of the metal, putting a strain on supply. New mine production may be slow to arrive, as mines are hard to find and expensive to develop.
Strong sterling pulls down FTSE 100
The FTSE 100 fell to daily lows of 7,110 at around 2pm today, as a strong sterling weighed on companies with overseas earnings.
US stocks rise after record closing on Friday
US stocks crept higher in New York this morning, amid optimism that interest rates would stay low for longer and a surge in commodity prices lifted shares of miners, energy and steel companies.
The S&P 500 rose 0.1pc while the Dow Jones Industrial Average added 0.4pc.
The S&P 500 and the Dow both closed at record highs on Friday as disappointing jobs data fuelled bets that the U.S. Federal Reserve would stay accommodative for longer.
Expensive tech stocks however weighed on the wider indexes, with the Nasdaq down 0.5pc after the opening bell.
Oil prices have climbed after a vital US pipeline was put out of action by a cyber attack.
Oil rose after the weekend attack hit the Colonial Pipeline Company, the largest in the US, which ships petrol and jet fuel from Texas to the East Coast. It serves 50 million consumers.
The US government declared a regional emergency on Sunday, while the company was unable to say when operations would return to normal.
In reaction, New York's WTI crude and London Brent gained roughly 0.75pc and 1pc respectively.
US fast-food chain hikes pay
Here's an interesting nugget from the US, where fears abound that we could be on the cusp of a jump in inflation: Chipotle is raising its average wage to $15 an hour as it moves to hire 20,000 workers.
The burrito chain plans to reach that level by the end of June and will set starting wages at $11 to $18 an hour. Chipotle said in January that its average hourly rate was about $13, with starting wages at its restaurants over $10.
It joins a growing number of companies reconsidering worker pay amid widespread labour shortages, Bloomberg reports.
Labour was a major concern for the industry even before the pandemic, with restaurants struggling to attract workers even at higher pay. Now the crisis has given a boost to delivery services and fast-food chains at the expense of their sit-down counterparts.
A Labour Department report on Friday showed US job growth last month fell well short of estimates, suggesting that employers are facing challenges attracting workers.
Wages for restaurant workers have risen steadily in recent years, according to data from the Bureau of Labor Statistics, though the trend has eased during the pandemic.
Landlords lose New Look fight
Landlords have lost a legal challenge against fashion chain New Look’s controversial company voluntary arrangement, Laura Onita writes.
The retailer, which has almost 500 stores and employs more than 12,000, asked property owners to switch to turnover-based rents as part of a wider restructuring of the business last year.
The majority of landlords agreed to receive no rent for three years on 68 stores and as little as 2pc of turnover on 402 others, under the terms of the CVA. Four property firms, including British Land and Land Securities, however, took New Look to court, arguing that a bare minimum market rent should be paid and the period of rent reductions was excessive.
Judge Antony Zacaroli quashed the claim in its entirety on Monday.
Doug Robertson, a restructuring and insolvency partner at Irwin Mitchell, said that other firms would now seek to switch to paying turnover-linked rent though CVAs.
Another vaccine on the way?
Inovio Pharmaceuticals has said its Covid-19 vaccine candidate is safe, well-tolerated and produced immune response against the coronavirus in all tested age groups as part of a mid-stage clinical trial.
The company's shares were up 7pc at $7.34 before the bell on the Nasdaq.
The trial enrolled about 400 participants aged 18 years and older at 16 US sites. The company said it had selected a 2mg dose for the phase 3 segment of the trial. Inovio plans to file preliminary mid-stage results with the U.S. Food and Drug Administration (FDA), Reuters reports.
National Grid installs new kit to stop green power going to waste
National Grid is installing new equipment it hopes will eliminate bottlenecks on renewable energy being generated and stop it going to waste, reports my colleague James Cook.
Power flow technology called SmartValve is being installed on five circuits at three substation sites in the north of England, the company said on Monday.
The National Grid has struggled to overcome bottlenecks caused when some circuits reach maximum capacity, preventing renewable energy being made available to the rest of the UK.
SmartValve technology will route power through circuits that do have available capacity, helping renewable energy to continue to be made available and eliminating bottlenecks.
Much of Britain's wind capacity is generated from wind farms in the North Sea, for example.
The electricity grid occasionally struggles to route the power generated around the network and has been forced to pay wind farms to stop spinning the blades of turbines to prevent further bottlenecks.
Vaccine maker BioNTech reports over €1bn in profits
German pharmaceutical company BioNTech has reported a net profit of €1.13bn (£974m) in the first quarter of this year on the back of strong revenues from the Pfizer-BioNTech coronavirus vaccine.
AP has more details:
The company's estimated revenues surged to over €2bn for the period from January to March, compared with just €28m in the same period last year.
BioNTech developed the first widely used vaccine against COVID-19 together with U.S. partner Pfizer, which holds the market and distribution rights in much of the world.
The Mainz-based company said its revenues included over 1.75bn in gross profits from vaccine sales in Pfizer's territories, and almost 200 million from sales to customers in its region.
BioNTech shares rose by more than 8pc to $198.55 in pre-market trading on Nasdaq Monday.
The results are a significant turnaround for the company, which made a net loss of 53 million euros in the first quarter of 2020.
Ethereum breaks $4,000
The world's second largest cryptocurrency Ethereum has broken through the $4,000 level, after climbing more than 2,000pc in the past year.
My colleague Matthew Field wrote yesterday about how Ethereum was emerging from Bitcoin's shadow. Read his article here.
Pound keeps climbing to $1.411
The pound climbed as high as $1.411 today, its strongest in more than two months, fuelled by a weaker dollar, optimism surrounding the economic recovery and market relief that a Scottish independence referendum looks unlikely in the near term after The SNP failed to win a majority in Scottish elections.
World's largest Bitcoin exchange suspends withdrawals
The world's largest bitcoin exchange Binance temporarily suspended withdrawals for around half an hour today, although did not explain the reason why.
The exchange says on its website that withdrawals can be suspended when the wallet is under maintenance or if there is a problem with the asset customers wish to withdraw.
The company, which was founded by Chinese Canadian Changpeng Zhao, has been head to head with the German regulator in recent weeks after The Federal Financial Supervisory Authority (also known as BaFin) threatened to fine the exchange for selling 'share tokens' without offering necessary prospectuses.
Binance, however, has asked the regulator to retract its allegation that it may be breaking securities laws by offering ‘tokens’ which are meant to imitate US stocks. BaFin has so far refused.
According to CoinMarketCap.com, Binance has a turnover often exceeding $50bn (£35.5bn) per day.
High street footfall slides
Footfall in UK retail destinations declined 4.1pc last week, compared to the week before, with analysts blaming rain rather than a slowdown in recovery.
According to data from Spingboard showed high streets saw a 6.6pc drop in activity while footfall in retail parks and shopping centres declined much less, by 1.3pc and 1.5pc.
Diane Wehrle, Insights Director at Springboard, said:
Rain across much of the UK for most of last week meant that footfall dipped again from the week before. The impact of the rain was evident, with a more modest drop in activity in the enclosed environments of shopping centres and in retail parks that are easily accessible by car than in high streets.
... Footfall in both high streets and shopping centres remained more than a quarter below than their levels in 2019, however it is likely to be these two destination types that will receive the greatest boost from the reopening of indoor hospitality next week.
Read the latest from The Telegraph's Money team:
'We lost three bidding wars’: Desperate property buyers face a battle in frenzied market Buyers are in ferocious contests amid a shortage of homes on the market
'Can I double my pension to £1m in three years?' Steven Cody has big ambitions for retirement but an unconventional approach to investing
Landlords paying double tax because of flawed HMRC systems: New rules are triggering overpayments and are 'not fit for purpose'
Total pay for top UK CEOs falls by $1m
Average total pay for chief executives at the UK's biggest listed companies has dropped by more than $1m (£719,000) to £3.5m from about £4.3m this year, according to PwC.
Analysis by PwC, which looked at the first 50 FTSE 100 companies to publish their 2021 annual remuneration reports, found that over half of those chief executives had their bonuses frozen this year. Also around one-third saw their bonuses reduced, waived or cancelled.
BT pensions black hole set to shrink by £2.2bn
The telecoms giant is expected to reveal the deficit for the UK's biggest corporate pensions scheme is down to about £7.5bn - far lower than expected, reports my colleague Ben Woods.
Read his full story here.
FTSE 100 rides surge in commodity prices
Russ Mould, AJ Bell investment director, said:
The commodities market continues to be on fire with a near 8pc rally in iron ore and a 2.6pc jump in the price of copper setting the tone for what could be an interesting week on the markets.
Commodities are being driven by stronger demand as the global economy recovers from the pandemic and supplies are getting tighter.
Given its heavy weighting towards natural resources, the FTSE 100 benefited from the latest surge in commodity prices, with seven of the index’s top 10 risers being mining companies, led by Rio Tinto and BHP.
The index traded 0.1pc higher at 7,138, with the miners more than offsetting weakness from consumer goods and tobacco companies – effectively showing that investors today were ‘risk-on’ and happy to bid up higher risk stocks and less interested in more defensive names like Unilever and British American Tobacco which tend to see earnings tick over in both good and bad economic conditions.
UBS offers $40,000 bonus to stop defections among junior bankers
UBS will pay a $40,000 (£28,400) one-time bonus to its global banking analysts when they are promoted, in an effort to stop junior bankers leaving.
The bonus is double what some competitors are offering, as lenders seek to reward younger employees weighed down by a surge in dealmaking.
Bloomberg has more details:
Starting as soon as this month the Swiss bank will pay the sign-on bonus to analysts promoted to associates on top of any regular salary increases, said people familiar with the move who asked not to be identified because the information is private.
The amount represents about 30pc of the annual base pay of a newly promoted associate, one of the people said.
Banks are raising pay for junior employees to prevent defections and ease discontent amid a jump in deals and an intensifying focus on work-life issues sparked by the pandemic.
Wall Street was set abuzz earlier this year by a leaked presentation from junior analysts at Goldman Sachs that detailed their gruelling workload and punishing hours.
Analysis: 'Main driver for the pound remains shifts on the dollar side'
After kicking off 2021 on something of a tear, sterling has been treading water for a couple of months now, reports my colleague, Louis Ashworth.
Re-taking $1.40 somewhat reflects smooth outcomes from recent elections and last week’s Bank of England decision, but the main driver for the pound remains shifts on the dollar side.
The dollar – which spent most of last year underwinding a burst in strength brought on by pandemic-induced market strain – has come under pressure again following Friday’s disappointing jobs report.
US assets, and risk assets more widely, remain in a weird spot: traders are embracing both goods news (as indicative of a recovery) and bad news (which further bulwarks the case for Federal Reserve support).
At the start of 2021, strategists predicted the pound could reach a post-EU referendum high of $1.45 by the end of the year. That still looks eminently possible, but most of the drive to that level will likely come from across the pond.
Centrica chief defends 'difficult but necessary' decisions in contracts row
Boss of British gas owner Centrica has defended the "difficult but necessary" process of moving workers onto new contracts which include no extra overtime pay.
The company has previously said the controversial new contracts are "essential if we're to become more flexible and price competitive".
Over the past decade, British Gas has seen profits half and lost more than three million customers. Last year, Centrica announced 5,000 jobs were being cut.
Chris O'Shea, Group Chief Executive said 98pc of UK workers had accepted the new terms. The 2pc who refused amount to around 500 engineers, my colleague Rachel Millard reported last month.
Centrica said Covid-19 continued to impact the company in the first quarter of 2021. Electricity demand from business customers was down 15pc, residential boiler installations were down 11pc compared to last year and non-essential service visits were postponed.
Strong pound responding to SNP results, say analysts
“Calls for an independence referendum certainly won’t go away, but the FX market doesn’t seem to be reading the election outcome as heralding fresh immediate political risks for the pound,” Richard Franulovich, head of foreign-exchange strategy at Westpac Banking Corp. in Sydney, told Bloomberg.
Revenues jump at funeral provider Dignity
The UK's only listed funeral services provider, Dignity PLC, has reported a jump in revenue, as a result of a significantly higher than expected number of deaths.
Revenue rose to £94.7m in the first quarter, compared to £83.1m last year.
But in a trading update, the company said Covid-19 had a distorting impact on the business' operations and financial results, making comparisons to the previous year difficult.
"It also makes the short-term future hard to predict because we don't know whether we face a period of a lower than the average death rate or another wave of contagion and a subsequent higher number of deaths," the company said.
"The restrictions on funeral sizes continue to impact the average revenue per funeral."
Iron ore prices leap 10pc
Iron ore prices leapt 10pc in Asia trading today, with the global recovery from the pandemic expected to supercharge commodities markets.
Steel prices jumped 6pc as well, amid concerns over supply after China announced on Friday it would tighten steel controls on steel production, to control pollution and "disorderly constructions".
UK house prices surge 8pc
UK house prices surged by 8.2pc annually in April, passing a record high set the previous month, according to the Halifax house price index.
Across the UK, the average house price in April was £258,204 and property values increased by 1.4pc month on month.
"House prices in April eclipsed the record high set the month before as the market continued to maintain its recent momentum," said Russell Galley, managing director at Halifax.
"In cash terms, almost £20,000 has been added to the value of the average home since the market had essentially come to a standstill in April 2020."
Pound breaks $1.40
The pound has broken above the key $1.40 level for the first time in more than two months this morning, climbing to $1.40725 against the dollar in early trading, despite a win for pro-independence parties in Scottish elections.
The pound may also be boosted by the weaker dollar, which dropped on Friday after a disappointing US employment report, dampened optimism about US recovery.
Against the euro, the pound's move was less noticeable but still its strongest since last Thursday - up 0.6pc on the day at 86.415 pence per euro.
FTSE opens higher, with companies upbeat about reopening
The FTSE 100 has opened up this morning, touching 7,157 points before dipping back to around 7,136.
The new 14-month high comes as UK companies continue to be upbeat about their prospects as restrictions continue to be eased.
Mining companies continue to rally, lifted by the commodity prices boom. Leading the FTSE 100 for gains were Rio Tinto (up 3.4pc), BHP Group (up 2.9pc) and Fresnillo (up 2pc).
Digital sales surge at Hotel Chocolat
Hotel Chocolat said a digital sales surge was responsible for the group's revenue increasing 60pc in the eight weeks to 25 April, compared to the previous year.
The company also noted "encouraging" signs as shops reopened and the Board now expects trading for the full year ending 27 June to be significantly ahead of expectations.
Greggs upbeat despite 'considerable uncertainty'
Upbeat Greggs expects a bounce back in sales and believes profits could return to 2019 levels this year, if restrictions continue to be eased.
The business performed well during the first few weeks after non-essential retailers reopened the company said, adding sales in the eight weeks to May 8 sales dropped just 3.9pc compared with a 23.3pc fall in the 10 weeks to March 13.
Despite warning of "considerable uncertainty", the sausage-roll maker seemed upbeat about Greggs' prospects for the year.
More on this story here.
Provident axes doorstep lending
Provident Financial has called time on its doorstep-lending division, putting 2,100 jobs at risk, as the pandemic hit the last nail on a business that survived the Wall Street crash of 1929 and the global financial crisis.
The company had been trying to revive the unit for years after botching an overhaul of the division in 2017 when it sought to replace its army of self-employed doorstep collection agents with direct employees.
"In light of the changing industry and regulatory dynamics in the home-credit sector, as well as shifting customer preferences, it is with deepest regret that we have decided to withdraw from the home-credit market," chief executive Malcolm Le May said.
The Provvy, a sub-prime lender since it was established in 1880, said it planned to either place the business into managed run-off or consider a disposal. It expects costs relating to an exit to be as much as £100m.
Good morning. The FTSE is tipped to push on higher above 7,100 as investors digest more upbeat noises around the economy.
High-street chain Greggs upgraded its profit forecasts for the year this morning, predicting it would bounce back to pre-pandemic levels sooner than expected.
The Halifax House Price Index this morning will give the latest snapshot on Britain's property market.
5 things to start your day
1) AstraZeneca chief’s £2.3m pay hike sparks row. Two of the pharma firm’s biggest shareholders have pushed against plans to increase boss Pascal Soriot’s pay packet ahead its annual meeting tomorrow.
2) Peanut allergy vaccine begins first human tests. The world is one step closer to a vaccine against peanut allergy after British biotech company Allergy Therapeutics announced plans to test its jab in human clinical trials.
3) Zoom-free Fridays to be tested out at HSBC. The bank is piloting the policy as it becomes the latest major UK business to tackle burnout during the pandemic.
4) Musk’s self driving claims contradicted by Tesla engineers. Documents obtained from California’s Department of Motor Vehicles appear to show that a Tesla director told the regulator that the company remained far away from developing fully-autonomous technology.
5) New CBI boss tells Brexiters to rejoin business lobby group. Britain’s leading business lobby group is trying to heal its divisions with members who quit over its anti-Brexit stance.
What happened overnight
Asian shares rose on Monday, cheered by a rally on Wall Street as a grim jobs report signalled to investors that interest rates will likely stay low.
Japan's Nikkei 225 rose 1.0pc in morning trading to 29,644.96. Australia's S&P/ASX 200 jumped 1.2pc to 7,166.10. South Korea's Kospi added 1.0pc to 3,230.35. Hong Kong's Hang Seng edged up 0.4pc to 28,729.22, while the Shanghai Composite was little changed but inched up to 3,418.95.
The regional gains are coming despite a recent surge in coronavirus infections in Asia.
Coming up today
Full-year results: Provident Financial
Interim results: Victrex
Trading update: Centrica, Dignity, HG Capital Trust
Economics: Halifax house prices (UK), FDI (China), economic sentiment (EU)