The government is considering the nationalisation of Thames Water as the company grapples with a debt of £14 billion. To execute its eight-year turnaround plan aimed at addressing its significant problem of leakage, the company is struggling to raise £1 billion from investors. Adding to its challenges, the CEO Sarah Bentley unexpectedly resigned with immediate effect on Tuesday.
5 things to start your day
1) Thames Water boss quits amid race to raise £1bn from investors | The government is closely monitoring the situation as Sarah Bentley departs before the completion of the turnaround plan.
2) Sunak’s stealth tax raid hits 1.2 million savers | Following Hunt’s commitment to cracking down on banks that offer poor savings rates, the figures highlight the impact of Rishi Sunak’s tax measures.
3) Guinness owner hits back at P Diddy over racism claims | Diageo is moving to dismiss a lawsuit filed by rapper P Diddy, labeling the allegations as “false and reckless”.
4) Britain risks missing out on £100bn electric car prize without radical changes, bosses warn | Business leaders emphasize the need for a national response to enhance the appeal of the UK in the fiercely competitive investment landscape surrounding electric vehicles.
5) Forecasting failures under Bailey have made inflation worse, admits Bank of England policymaker | It is acknowledged by a Bank of England policymaker that the Bank consistently underestimated price rises since the pandemic.
What happened overnight
Asian shares had a mixed performance despite a rally on Wall Street, driven by reports suggesting that the American economy is in better shape than initially feared.
Australia’s benchmark S&P/ASX 200 rose 1.1% to 7,194.00 after the government reported a 5.6% increase in the consumer price index for the twelve months leading up to May, with housing and food prices witnessing the most significant rises. Earlier this month, the Reserve Bank of Australia surprised markets by raising interest rates to combat ongoing price pressures.
In afternoon trading, Japan’s benchmark Nikkei 225 gained 1.5% to reach 33,029.73. However, South Korea’s Kospi fell 0.7% to 2,562.72, Hong Kong’s Hang Seng dropped 0.3% to 19,083.80, and the Shanghai Composite dipped 0.7% to 3,167.36.
Wall Street experienced a surge in stock prices due to positive economic data indicating strong consumer confidence and higher-than-expected home sales, alleviating concerns among investors regarding the macroeconomic outlook.
The Dow Jones Industrial Average closed 0.6% higher at 33,926.74. The broad-based S&P 500 rose 1.2% to 4,378.41, while the tech-heavy Nasdaq Composite Index jumped 1.7% to 13,555.67.
The yield on the benchmark 10-year US Treasury increased to 3.76% from 3.72% late Monday. Moreover, the two-year Treasury yield, which is more influenced by expectations for the Federal Reserve, rose to 4.76% from 4.74%.
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