Global stocks rise and oil price slips amid hopes of US-Iran peace deal - as it happened

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The Bank of England is in no rush to raise interest rates while the outcome of the Iran war remains uncertain and the UK’s growth rate stays weak, the governor, Andrew Bailey, has said.

In a signal that borrowing costs will remain at 3.75% at least during the summer, Bailey said it was tolerable for inflation to stay above the Bank’s 2% target during the current crisis. However, that would change if a more permanent increase in prices began to take effect, he said.

“Given the context of softness in the real economy and uncertainty around the scale and duration of the shock, tolerating temporarily above-target inflation to provide some support for the real economy is an appropriate way to approach the trade-off [between inflation and activity],” Bailey said.

“But that tolerance would weaken if signs of second-round effects begin to emerge.”

Oil prices fell on Friday as investors hoped for an end to the US-Israel war on Iran, leaving the commodity poised for one of the biggest monthly declines ever.

The price of Brent crude futures, the global benchmark, fell by 1.3% to $91.54 and is nearing a fall of 17% since the start of May.

The price of futures for West Texas Intermediate, the North American benchmark, fell by 1.4% on Friday morning to $87.64 a barrel. That was down 7% from the peak earlier this week of $94.70.

The optimism came after Donald Trump circulated a draft peace agreement for the war in Iran among allies.

Oil prices on track for steepest monthly fall since 2020

Asda has agreed a deal to update its online grocery store and home deliveries from next year using technology from Ocado.

Ocado software will be used to support Asda’s grocery website and deliveries from its stores and “dark stores” – smaller warehouses that are not open to the public – from early 2027, the companies announced on Friday.

Asda, Britain’s third largest supermarket, will also use Ocado’s underlying technology to manage deliveries of orders placed through apps such as Uber Eats, Deliveroo and Just Eat, and for click-and-collect services through the supermarket’s website and apps.

The deal means Ocado will soon provide the technology supporting deliveries at three of the UK’s biggest grocers.

Asda strikes deal to use Ocado software for home deliveries from next year

Government urged to push water companies to carry less debt

Jasper Jolly

Jasper Jolly

The government has been urged to push water companies to carry less debt after South East Water became the latest supplier to breach the terms of its operating licence.

South East Water lost one of its two investment-grade ratings from Moody’s Investors Service on Thursday. Regulator Ofwat requires two investment-grade ratings as a sign of financial stability and to prevent companies from running up unsustainable debts.

The downgrade came in the same week that 22,000 people in Kent suffered from water outages. South East Water asked households to only use water for essential purposes because of the hot weather in an effort to preserve supplies.

Mike Martin, the Liberal Democrat MP for Tunbridge Wells, said:

The news that South East Water’s debt has been downgraded to junk, whilst there are water outages all over Kent is deeply concerning, but not surprising. This is the product of decades of poor leadership and the taking on of too much debt by the company.

Fundamental reform is urgently needed – and that includes the debt levels that water firms carry. The government needs to be less timid and act to protect taxpayers and customers from this type of financial mismanagement.

South East came under intense pressure earlier this year after major outages. Chief executive David Hinton and board chair Chris Train both resigned this month after MPs heavily criticised their leadership during the crisis.

The ratings downgrades mean South East will have to engage with Ofwat over a possible turnaround regime to try to get its debt burden under control.

Cat Hobbs, founder of We Own It, a campaign group, said environment secretary Emma Reynolds should put South East Water into special administration and then nationalise it. She said:

It’s completely disgraceful that the government is allowing this desperate situation to happen yet again. This is a company that prioritises making a profit for shareholders in Australia and Canada instead of investing in the necessary infrastructure to keep the taps running. 9 out of 10 countries run water in public ownership, England is an ideological outlier and the experiment has failed.

Shockingly, almost unbelievably, South East Water’s licence requires a 25 year notice period to end the contract - unless they fail in their statutory duties. Fail is exactly what they have done so the government must use this chance to take back this essential resource and natural monopoly.