FTSE rises to new pandemic high

That is all from us today - here are some of our top stories:

• They said it couldn't be done: Australia deal proves 'Remainer' trade experts wrong
• Ikea and Grolsch join Kopparberg boycott of GB News
• Debenhams eyes return to the high street under new owner Boohoo
• If you go to restaurants, you can come to the office, Morgan Stanley tells staff
• AstraZeneca Covid-19 treatment fails to help those exposed to virus

Thanks for following along. Have a great evening and do join again tomorrow.

American Express will allow most employees to work from home for up to two days a week permanently, in a hybrid approach that contrasts some major Wall Street banks.

AmEx will begin bringing staff back to the office starting September 13, with an aim to fully adopt the hybrid model in the week of October 4.

Most of the US and UK staff of the credit card issuer will have the choice to work remotely on Mondays and Fridays, chief executive Stephen Squeri said in an internal memo first reported by Bloomberg. The final decision will, however, depend on local conditions and health authority guidance.

The first three weeks will be a "transition period" to allow employees to "get used to" going to the office, though occupancy will be restricted to 50pc and most of the staff will work in the office only two days a week.

Those who worked full-time from home before the pandemic will continue to do so, while those who cannot "perform their jobs effectively" from home will be required to go to office daily.

MacKenzie Scott, Jeff Bezos's ex-wife and billionaire philanthropist, has given $2.7bn (£1.9bn) to a variety of charities, she wrote in a blog post. It brings her total donations since her first in July 2020, to a whopping $8.5bn. 

This time she donated to 286 organisations from the Alvin Ailey American Dance Theatre, to racial equity funds in philanthropy and journalism.

Ms Scott, who is remarried to Seattle science teacher Dan Jewett, ended up with a 4pc stake in Amazon.com after her and Bezos's divorce. She is worth almost $60bn.

In reaction to the UK-Aus trade deal, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: 

“Australia is an important growth market and the industry welcomes the agreement in principle of a trade deal between the two countries.

"If tariffs can be avoided, making UK manufacturers more competitive against international rivals, there is some potential to increase our vehicle exports and we look forward to seeing the finer details of the deal, to ensure the agreement delivers for the automotive sector.

"Given the integrated nature of the automotive industry, however, and the importance of proximity, we must also ensure smooth trade with markets closer to home.”

Read my colleague Louis Ashworth's piece for all the details about the trade deal.

Metallica filed paperwork in Los Angeles Superior Court last week, suing Lloyd’s of London for allegedly refusing to pay out after the rock band was forced to postpone a six-date South American tour in April 2020, amid the pandemic.

Reports say the band alleged the insurance market had breached its contract and that they were seeking unspecified compensatory damages.

Metallica had a “cancellation, abandonment and non-appearance insurance” policy in place in case of show cancellation, according to the filing, but Lloyd's would not compensate the band because it had a disease exclusion.

According to City AM, Lloyd’s said: “Lloyd’s is not an insurance company, it oversees and regulates a market of independent insurers.

“For that reason we have no information on any specific policy or law suit and in any event are not authorised to comment on matters in litigation.”

US industrial production rose as motor vehicle production rebound but manufacturers struggle with worker shortages and supply disruptions, reports Louis Ashworth.

Output in the manufacturing sector climbed 0.9pc in May according to the Federal Reserve, slightly beating expectations of 0.6pc. 

Ian Shepherdson from Pantheon Macroeconomics said activity was improving at a “decent clip”.

“Manufacturing production is now back to the pre-Covid level, though the cumulative losses are yet to be recovered,” he said.

Boohoo is preparing to bring a Debenhams store back to the high street in a bid to secure deals with major beauty brands, reports Laura Onita. 

John Lyttle, chief executive of Boohoo, which bought Debenhams in January, said it is in talks to open a small store outside of London just months after the department store chain shut its remaining stores following its collapse in January.

Mr Lyttle said the move was designed to get more beauty suppliers on board after Boohoo launched Debenhams as an online-only brand in April. 

Read Laura's full story here. 

My colleague Louis Ashworth writes: 

US producer prices rose at the fastest pace in nearly 11 years as inflationary pressure continues to build in the world’s top economy.

Prices climbed 6.6pc in the 12 months to May, according to Bureau of Labor Statistics going back to 2010.

Prices climbed 0.8pc over the month, topping economists’ estimates for a 0.5pc rise.

The rise showed the effects of a continued “mismatch between supply and demand”, according to Oxford Economics’ Mahir Rasheed, as well as the ‘base effects’ of a dive in prices last spring.

The figure will likely filter through to consumer prices, fuelling fears that the US economy is running hot as it bounces back from the pandemic.

It will add to pressure on the Federal Reserve, which is beginning a two-day meeting over plans to eventually rein in the unprecedented wave of support it released in response to the pandemic.

US stocks slipped today, following new data showing Americas reined in their spending last month. 

The Dow Jones dropped 0.4pc, the S&P fell 0.2pc and the Nasdaq was down 0.5pc, after the Commerce Department said retail spending fell 1.3pc last month.

Eight of the 13 major retail categories posted declines in sales receipts last month. 

Retail sales decreased 0.7pc, motor vehicle and parts dealer sales fell 3.7pc and furniture stores, electronics outlets and building materials merchants also posted declines.

Restaurant sales however rose 1.8pc in May, signalling a consumer shift toward services spending as coronavirus restrictions ease. 

Confidence among US homebuilders declined in June to a 10-month low as elevated costs continued to dampen demand for new homes.

Bloomberg has more details: 

A gauge of builder sentiment fell to 81 this month from 83, National Association of Home Builders/Wells Fargo data showed Tuesday. The median forecast in a Bloomberg survey of economists called for no change from a month earlier.

The decline in sentiment indicates that continued elevated costs for some building materials and labour are keeping some buyers out of the once red-hot US housing market. Despite the easing in confidence, the gauge remains well above pre-pandemic levels and has held within a narrow, three-point range this year.

“Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June,” said Chuck Fowke, chairman of the NAHB and a builder in Tampa, Florida, said in a statement.

"These higher costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building.”

The Telegraph's chief City commentator Ben Marlow has been writing about the latest employment figures, which show unemployment fell to 4.7pc in May:

Just as Britain confounded the naysayers and avoided a double-dip recession, gloomy forecasts of a double-digit unemployment rate have proved to be well wide of the mark.

But the glut of positive jobs data masks some worrying trends. While the idea of Britain’s Covid-battered economy miraculously becoming an engine of job creation is a seductive one, the reality is that employment remains half a million below pre-pandemic levels.

It is already evident that young people have borne the brunt of the pandemic jobs rout with under-25s accounting for 63pc of the nearly 700,000 jobs lost in the 12 months to the end of January. The overall picture improved last month but among 25 to 49-year-olds the rate is still increasing.

[...] Sky-high youth unemployment continues to hold back the Spanish economy today, while Greece had one of highest rates of long-term unemployment in the OECD following its 2010 bailout. The UK must learn the lessons of failed eurozone states.

This extract comes from our City Intelligence newsletter. You can sign up for the newsletter here to receive incisive analysis of the day's biggest corporate story.  

The FTSE 100 shrugged off news that the UK's reopening date will be pushed back to July, reaching 16-month highs earlier in the session. 

The more domestically-focused FTSE 250 however lagged throughout the day, with travel stocks TUI and the Trainline weighing on the index. It is currently down 0.25pc. 

London-listed holiday group TUI is down 3.8pc as UK restrictions threaten to drag on throughout large parts of the summer. The operator made the decision to axe holidays into July because of "ongoing uncertainty." 

Here's the day's best from The Telegraph's Money team: 

• One in 100 chance your travel insurance will pay out if you have to cancel your holiday: Providers make 'bold' and 'confusing' claims
• Returning to the office? The best value rural hotspots for a part-time London commute: Here's where to move near the capital to get the biggest house for your money 
• Wealthy savers waste £20,000 tax break: Most high earners with an Isa do not use the full allowance

Sign up to the weekly Money newsletter here. 

Ashtead has returned to growth as successful vaccination campaigns have aided the equipment rental company, reports Ben Gartside. 

Revenue leapt 23pc in the three months to the end of April, as the economy began to reheat following the coronavirus pandemic. 

Contracts with the Department for Health and Social Care proved profitable, as the government department accounted for 29pc of the group’s UK turnover last year.

Ashtead, who are the largest supplier of traffic cones in the UK, saw testing centres lead demand for mobile generators and portable tower lights.

The company announced it expects sales to increase between 6pc and 9pc globally due to post-vaccine reopenings.

Chief Executive Brendan Horgan welcomed the results, saying that it proved Ashtead’s resilience.

Mr Horgan said: “We have shown that our business can perform in both good times and the more challenging ones. We enter the new financial year with clear momentum and a strong position in all of our markets”.

Ashtead recently launched a new Canadian offshoot, which the company expects will grow by a quarter next year.

In the last decade, the company’s share price has rocketed from £1 to over £51, driven by growth in the US.

The equipment rental company initially focused on the UK, but now conducts more than 90pc of its operations in the US and Canada. Following its growth across the Atlantic, the company said future results would be measured in dollars rather than pounds.

Back in the UK, Bank of England Governor Andrew Bailey has vowed to give the likes of Bitcoin "tough love" as policymakers continue to look at regulating cryptocurrencies.

The Bank launched a consultation last week looking at the possibility of regulating cryptocurrencies as well as examining the possibility of launching its own digital form of exchange.

PA has the details:

Speaking at TheCityUK's virtual annual conference, Mr Bailey said while innovation can challenge existing rules, public interest must be at the heart of advances in digital currency.

He said: "What we cannot have is a world where innovation gets a free pass to ignore the public interest.

"The odds of such an approach not ending well are too high."

He added the Bank is keen to get ahead of the curve and set out "rules of the road" for fintech firms and digital currency to ensure financial stability is protected and public confidence in money is not impacted.

He said: "Playing catch-up with public policy is not a recipe for success.

"There will inevitably be elements of tough love in such a process, and some disappointed ambitions, but I am confident that out of it will come a robust form of innovation."

Traders appear to have reacted to that sign of rising inflation by sending US stocks into the red following the opening bell.

The S&P 500 and Nasdaq are just 0.07pc down, but the Dow has fallen by 0.28pc - all contrast sharply with rises of around half a per cent around Europe. 

The 0.8pc spike in US producer prices was a steeper than expected increase, leading investors to fear they could be passed onto consumer prices. Their major concern is that the Federal Reserve, which meets tomorrow to decide on whether or not to continue its emergency bond purchasing programme, could opt to taper support in order to combat inflation.

As Bloomberg reports:

Since the start of the pandemic the central bank has bought more than $2.5 trillion of US Treasury debt, effectively covering more than half of the federal government’s red ink over that time.

That buying - together with about $870bn in purchases of mortgage-backed securities - has flooded the financial markets with liquidity, contributing to a doubling of the stock market from its pandemic low.

“It will be like crawling along a knife-edge ridge,” former Bank of England policy maker Charles Goodhart said of the task facing the Fed. “If you do too little you’ll find inflation will just go on accelerating. If you do too much you get into a financial crisis and a recession.”

US producer prices rose more than expected in May, prompting concern that wholesale inflation will move through the economy and put pressure on consumer prices.

The US Labor Department said today that its producer-price index rose 0.8pc in May compared to the previous month and up slightly from the 0.6pc increase in April.

Between 2017 and 2019, the average rise was 0.2pc.

Norway's  energy giant Equinor says that by 2030 it will plough more than half of its annual investment into renewable energy, as it continues to reinvent itself in line with the global push to cut carbon emissions, reports Rachel Millard. 

The target is a significant increase on the 4pc it spent on renewables and low carbon projects in 2020. It also plans to cut its net carbon intensity 20pc by 2030, 40pc by 2035 and 100pc by 2050. 

Equinor, which is 67pc owned by the Norwegian state, was formerly named Statoil but rebranded in March 2018 as renewable energy rose up the agenda among investors and oil and gas companies. 

Anders Opedal, president and chief executive, said that, in the longer term, Equinor expects to produce less oil and gas, when demand starts to reduce. 

During 2020, Equinor produced more than two million barrels of oil and gas equivalent per day, and 1,662GWh of renewable energy. Most of its oil and gas production is in Norway, followed by Angola and Nigeria. 

Oil and gas companies are under growing pressure to produce more low carbon energy, with many aiming to use cash from their oil and gas businesses to invest in wind and solar power.

Equinor said it expected to invest around $23bn [£16.4bn] in renewables between 2021 and 2026 and to install up to 16GW by 2030, with expected returns of 4-8pc. It also wants to develop the capacity to store 15-30m tonnes of carbon dioxide and develop hydrogen.    Opedal added: “Our strategy is backed up by clear actions to accelerate our transition while growing cash flow and returns."

The UK is showing up its trade sceptics with a flurry of dealmaking just six months since Brexit, reports my colleague Louis Ashworth. 

He writes: 

When Britain quit the European Union in 2016, a litany of experts warned that it could take the UK a decade to reach a new trade relationship with Brussels - and even longer to strike deals with other countries.

One leading lawyer, David Allen Green, suggested in the wake of the referendum that three years of exit negotiations could be followed by up to 10 years of further talks on trade.

Others claimed the UK did not have expertise or competence to do its own deals, and hopes of agreements around the world were doomed to failure.

But in fact it took rather less than the mooted decade to secure an EU deal – albeit an imperfect one.

Read his full story here. 

The FTSE 100 has lifted to a new pandemic high, trading at the highest level since the end of February 2020. 

US retail sales fell more than expected in May, dropping to 1.3pc last month, signalling an end to the stimulus spending splurge that has taken place over the past two months.

Over the last year, demand for goods has been propped up by elevated savings supported by fiscal stimulus, pushing total retail sales above pre-pandemic levels.

However the May decline in retail sales suggests that as travel picks up and entertainment venues reopen, spending on goods is starting to subside.

The pound has dropped to a one-month low against the dollar, in what analysts say is the breaking of a technical level that has not changed the bullish narrative on Britain's currency.

Sterling  slid gradually during the morning session and is currently down 0.3pc at $1.4060, having touched $1.4035, its lowest in one month.

Versus the euro, it was down 0.4pc at 86.24 pence per euro .

Simon Harvey, FX analyst at Monex Europe, told Reuters that the move was not linked to any news event but rather a breaching of the $1.4070 level to which it had come close in previous sessions.

"Sterling's bearish bias has been in place over the past week or so as it toyed with breaking below 1.41 against the dollar," he said.

"Today, momentum was on the side of the GBP bears as the pair smashed through the 1.4070 handle, triggering stops and pushing the currency down closer to its 50-day moving average, which rests at 1.4010."

He added that he was bullish on the pound given that the delay in lifting remaining lockdown measures did not change the "structural backdrop" - expectation of an economic recovery.

Two of the world's largest independent oil traders have said crude prices are likely to rise even higher this year due to growing demand. 

Brent crude, the international benchmark, has already reached a two-year high of $73 a barrel in London and could rise to $78 later this year, said Vitol Group Chief Executive Officer Russell Hardy.

The demand recovery is healthy and consumption will reach pre-Covid levels next year, added Alex Sanna, head of oil and gas marketing at Glencore Plc.

The two traders, speaking at the FT Commodities Summit, didn’t predict a so-called “supercycle” that could result in a sustained surge in prices. Crude will only reach $100 a barrel if the Organization of Petroleum Exporting Countries and its allies choose to force it that high, said Hardy.

“It is not a supercycle, because the energy transition tells us demand will peak and drop,” said Hardy.

“I believe in spikes in demand and regulatory changes, and that is going to create a lot of volatility,” Sanna said.

Futures point to muted gains for US stocks today ahead of today's Federal Reserve meeting, as investors expect that stocks will climb through the rest of the year due to easy monetary policies.

Futures tied to the S&P 500 and the Nasdaq 100 lifted 0.1pc while the Dow's futures were flat. 

“Investors seem a bit more convinced the Fed will do what it says it is going to do and stay put,” Edward Smith, head of asset allocation research at U.K. investment firm Rathbone Investment Management.

“That should mean we have relatively easy financial conditions and that should be good for equity markets.”

Data on industrial production, producer prices and retail sales are also expected in the US today. 

Copper’s stellar rally is starting to creak as investors unwind their bullish bets and evidence of demand weakness mounts in China’s powerhouse manufacturing sector.

Bloomberg has more details: 

Prices plunged as much as 4.3pc in London, crashing through their 50-day moving average to trade at a seven-week low. Copper hit an all-time high last month, but pressure on the bellwether metal is mounting as Chinese demand softens and investors grow more confident that the strong inflationary forces seen across leading economies will prove transitory.

The possibility that the U.S. Federal Reserve will soon start to slow the pace of emergency asset purchases is also bolstering the outlook for the dollar, shaking a pillar of support for copper and other commodities that have been boosted by the currency’s weakness over the past year.

While supply issues and a demand uplift arising from the green-energy transition sustain the long-term outlook for copper, an investor exodus appears to be accelerating as shorter-term fundamental, macroeconomic and technical pressures build.

Fintech giant Wise has drawn up plans to launch a direct listing on the London Stock Exchange as soon as this week, reports Sky News. 

Insiders told Sky that a valuation of well above £5bn was "almost certain", which would solidify the company's status as one of Britain's most valuable start-ups.  

However the exact timing depends on final approvals from regulators which means an announcement could be pushed to later this month.  

Traders will be closely watching for decisions emerging from the Federal Reserve's two-day meeting which starts today, as the US central bank considers when and how fast to withdraw the massive bond-buying program launched in 2020.

Boss Jerome Powell is will make a statement following the meeting's conclusion tomorrow, when he is expected to point to continued strength in the economy and acknowledge the first conversations among its policymakers about tapering support. 

Legal and General's investment arm is throwing US insurer AIG and energy giant PPL out of its sustainability-focused funds over their climate policies, reports Rachel Millard. 

Legal and General Investment Management (LGIM), which manages £1.3trn, argues the pair have not done enough to address the risks posed by climate change. 

It is also excluding Industrial and Commercial Bank of China and China Mengniu Dairy, as part of its annual review into how LGIM savers' money is helping or hindering the fight against climate change.  

It says all four have not responded satisfactorily to engagement from LGIM and/or have breached LGIM's "‘red lines’ around coal involvement, carbon disclosures or deforestation". 

They are being booted out of actively managed funds with £58bn of assets, including its Future World ranges and auto-enrolment default funds in L&G Workplace Pensions and the L&G MasterTrust.

The exclusion does not mean the companies are excluded from all LGIM investment. 

Michelle Scrimgeour, chief executive of LGIM, said: "Progress cannot be made by acting in isolation and we, as investors, have a real role to play in the responsible allocation of capital. 

"Climate change is one of the most critical sustainability issues we face and we fully support efforts to align the global financial system with a pathway well below two degrees centigrade."

A further nine companies, including MetLife and ExxonMobil, remain excluded from the LGIM funds while LGIM tries to get them to improve their climate policies. 

Airline stocks are recovering following a sell off yesterday that was prompted by news that Britain's reopening date would be pushed back to July. 

Today, Wizz Air and EasyJet are both up 1.34pc and 1.27pc respectively. British Airways owner also lifted 1.86pc. 

 PwC will add 100,000 to its global workforce over the next five years as part of a $12bn (£8.5bn) investment in recruitment, training and technology, the FT is reporting today. 

The investment plan, which will increase the firm's headcount by one third, is designed to capture the growing market for environmental, social and governance advice and includes a $3bn (£2.1bn) plan to double its Asia-pacific business.     

Bob Moritz, global chair of PwC, told the FT that the firm was “going to massively invest to redefine itself and rebrand itself to make sure we’re valuable for what our clients need and what the world needs”.

Britain's competition watchdog said today it is looking into whether Apple and Google's control over mobile ecosystems is stifling competition across a range of digital markets.

The CMA said it was launching a market study into the two companies "effective duopoly" because it is concerned this could lead to reduced innovation across the sector and consumers paying higher prices for devices, apps and other services. 

The watchdog said it will also examine any effects of the firms’ market power over other businesses – such as app developers – which rely on Apple or Google to market their products to customers via their phones.

Andrea Coscelli, Chief Executive of the CMA said:

Apple and Google control the major gateways through which people download apps or browse the web on their mobiles – whether they want to shop, play games, stream music or watch TV. We’re looking into whether this could be creating problems for consumers and the businesses that want to reach people through their phones.

Our ongoing work into big tech has already uncovered some worrying trends and we know consumers and businesses could be harmed if they go unchecked. That’s why we’re pressing on with launching this study now, while we are setting up the new Digital Markets Unit, so we can hit the ground running by using the results of this work to shape future plans.

 

Morgan Stanley's boss James Gorman has told bankers that if they are happy going to restaurants, then they can return to the office as major employers clash with staff over the future of working life, reports Lucy Burton. 

She writes: 

Morgan Stanley's boss James Gorman has told bankers that if they are happy going to restaurants, then they can return to the office as major employers clash with staff over the future of working life. 

During a conference organised by the bank, Mr Gorman sent out a clear message to those in New York who are hesitating to come back: "If you can go into a restaurant in New York City, you can come into the office and we want you in the office." 

He added that more than 90pc of employees in its Broadway headquarters were now vaccinated and that remote working from locations such as Florida would not be accepted. 

 Read her full story here. 

My colleague Gareth Davies has more on the UK-Australia free trade deal: 

The new deal will help distillers by removing tariffs of up to 5pc on Scotch whisky, according to a Downing Street statement stressing the benefits of the deal to the whole UK.

It said more than 450 businesses in Wales exported to Australia last year and that "life science companies and chemicals manufacturers are set to benefit in particular".

For Northern Ireland, it said "90pc of all exports from Northern Ireland to Australia are machinery and manufacturing goods - used extensively in Australia's mining, quarrying and recycling sectors. Under the new FTA tariffs will be removed and customs procedures will be simplified".

And car manufacturers in the Midlands and North of England will see tariffs of up to 5pc cut, it added.

Read his full story here. 

British housebuilder Bellway is attempting to harness the momentum in housing prices by making a record investment in land since last August, expecting demand for new homes to remain robust. 

Despite encountering some delays in planning processes due to Covid-19, the company said it has contracted to acquire almost 16,000 plots since August 2020, up from 10,000 plots in its 2020 financial year. 

Bellway said today that it expects to complete around 10,000 homes this year, compared to 7,522 in the previous 12 months. It also expects the the average selling price to rise to above £300,000, compared to £293.054 last year. 

Jason Honeyman, chief executive, commented:

We have continued our front-footed approach to land acquisition, making a record investment in new sites, thereby enabling us to grow sales outlets and meet the ongoing demand for new homes in the years ahead.  This disciplined investment approach, together with our strong balance sheet, ensures that Bellway is in a good position to continue its long-term growth strategy.

We have continued our front-footed approach to land acquisition, making a record investment in new sites, thereby enabling us to grow sales outlets and meet the ongoing demand for new homes in the years ahead.  This disciplined investment approach, together with our strong balance sheet, ensures that Bellway is in a good position to continue its long-term growth strategy.

The UK's new trade agreement with Australia means British products will be cheaper to export and young people will find it easier to work in Australia, the government said this morning. 

The deal eliminates tariffs on imported Australian goods such as wine, swimwear and confectionery, it said.

The government added that British products including cars, Scotch whisky, biscuits and ceramics will also be cheaper to sell into Australia, boosting a trade relationship worth £13.9bn last year. 

Under the agreement, Britons under 35 will be able to travel and work in Australia more freely, while British farmers will be protected by a cap on tariff-free imports for 15 years. 

The final agreement in principle is to be published in the coming days. 

Prime Minister Boris Johnson said:

Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.

This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.

A French court on Tuesday ordered IKEA to pay a €1m euro (£861,000) fine for spying on its French staff, after the world's biggest furniture retailer was found guilty of improperly gathering and storing data on its employees.

Reuters has more details: 

The French branch of the Swedish company was accused of snooping on its workers over several years, and breaching their privacy by reviewing records of their bank accounts and sometimes using fake employees to write up reports on staff.

Prosecutors had been pushing for a €2m fine against the firm, which is owned by the Ingka Group.

The company said it was reviewing the court decision to see if any further measures were needed, after it took steps to stamp out the surveillance tactics.

"IKEA Retail France has strongly condemned the practices, apologised and implemented a major action plan to prevent this from happening again," the company said.

The flatpack furniture firm's former chief executive in France, Jean-Louis Baillot, was also found guilty in the case and handed a two-year suspended prison sentence. Judges fined him €50,000 euros for storing personal data.

The allegations centered on the 2009-2012 period, although prosecutors said the spy tactics began in the early 2000s.

The group was accused of trawling through employees' data to check-up on their finances and personal lives. It has recognised some of these tactics, although it has denied setting up a widespread espionage system.

A collapse in long haul travel has pushed UAE airliner Emirates to its first loss in three decades, with its deficit for the year ending March 31 spiralling to 22.1bn dirhams (£4.27bn), while revenue dropped 66pc to 35.6bn dirhams (£6.88bn). 

The group said government support would continue, with Dubai injecting an extra $1.1bn (£780m) into the airline on top of the £2bn (£1.42bn) lifeline last year. 

The airline's chairman Sheikh Ahmed bin Saeed Al Maktoum said today the recovery from the coronavirus crisis would be patchy and no one could predict when it would end.

Britain and Australia have agreed the first trade deal to be negotiated from scratch since Brexit, with a formal announcement expected later today, the BBC is reporting. 

The new trade deal is expected to give UK and Australian businesses easier access to each other's markets and was apparently agreed by UK Prime Minister Boris Johnson and Australian PM Scott Morrison over dinner at Downing Street last night.

The UK government has signed a series of other trade deals over the past year, but these have been rollovers of those the UK already had as part of the EU.

Like the markets, the pound shrugged off the delay to the UK's lockdown easing plan, with investors instead looking to positive jobs data that showed a record jump in employee numbers in May. 

In early London trading, the pound held steady above $1.41, up less than 0.1pc against the dollar.  

Versus the euro, it was down around 0.1pc at 86.03 pence per euro.

Employees overwhelmingly back a hybrid approach to working but bosses appear set to burst the WFH dream, report my colleagues Lucy Burton, Tom Rees and Hannah Boland. 

They write: 

Bosses are on a collision course with staff over a shift to permanent home working as official figures indicate huge numbers of employees want to stay away from the office. 

The Prime Minister's delay to the Covid-19 roadmap on Monday evening means hopes have been dashed for organisations seeking a return to normal from next Monday - with Goldman Sachs among a string of major employers expected to change their plans.

However, figures from the Office for National Statistics released on Monday suggested that many staff are hopeful that they will not have to return permanently at all. 

A total of 85 per cent of adults who are currently working from home want to adopt a “hybrid” approach after the pandemic by splitting their time between home and the office, data from the ONS revealed.

At the same time, almost two in five firms expect more than three-quarters of staff to be in their normal workplace post-Covid, indicating that businesses and employees could be at loggerheads when the Prime Minister’s work from home advice is lifted.

Read their full story here. 

Markets in London shrugged off the extension of lockdown restrictions this morning, following Boris Johnson's announcement last night that he would aim to reopen the economy by July 19.

The FTSE 100 is currently up 0.4pc, with large dollar earning companies such as Unilever and British American Tobacco providing a boost.

Just Eat was also up 2.3pc after announcing its acquisition of US online delivery platform Grubhub was complete. 

The FTSE 250 was also up 0.3pc, with multinational food service group SSP leading the gains, up 3.13pc. Tech investment trust, Allianz Technology Trust, was close behind, up 2.96pc.

Boohoo sales leapt 32pc to £486.1m in the three months to the end of May, boosted by the integration of the company's recent acquisitions including Dorothy Perkins, Wallis, Burton and the Debenhams online department store. 

The online fashion business also agreed today to sign up to a forensic auditing initiative, Fast Forward, as part of its attempts to improve the firm's supply chain and reputation.

The decision comes as retired judge Sir Brian Leveson completed a third report as part of an independent review into the company, following the exposure of poor practices at some of the factories it used.

Bosses have also committed to publish its global supplier list in full by September this year.

Chief executive John Lyttle commented:

The two year CAGR [compound annual growth rate] of 38pc highlights the Group's continued phenomenal growth, with revenues having increased 91pc over the last two years, with particularly strong performance in key markets such as the UK and US, where sales have more than doubled.

[...] We continue to make great progress on our Agenda for Change programme, with this morning's latest report from Sir Brian Leveson outlining the seriousness with which the Group is determined to develop and demonstrate a gold standard in our supply chain.

The FTSE 100 has opened up 0.18pc, currently trading a 7.163 points. 

The FTSE 250 is trading flat, at 22,765 points. 

Laith Khalaf, financial analyst at AJ Bell, comments:

All the dials in the labour market are pointing in the right direction, but they’re heavily distorted by the gravitational pull of the furlough scheme, lockdown lifting bottlenecks, and the effect of annual comparisons now lapping the first wave of the crisis. We won’t get a clear picture of the health of the post pandemic economy until the back end of this year, and that means the Bank of England isn’t going to rush to any interest rate hikes in the next few months, even if the UK looks to be firing on all cylinders.

Hospitality businesses are getting friction burns, as the entire sector opens up and looks for staff to service a horde of customers, hungry to make the most of their new freedoms. However, after an initial round of playing catch up, there’s only a certain amount of food and booze customers will want to consume and so the growth from reopening can’t be extrapolated infinitely. That applies across a whole host of sectors and indeed the UK economy at large.

[...] Unemployment is heading in the right direction, but we are still missing around half a million jobs compared to February of last year, not counting the uncertain future of those on furlough. This highlights the economic damage the pandemic has wrought and in all the progress we have made, it’s important to recognise that the reopening of the economy naturally brings with it an element of growth from a very low base. 

The latest jobs data is out. Russell Lynch writes: employers took on a record 197,000 staff in May as Britain's jobs recovery gathered pace with the lifting of Covid-19 restrictions, official figures have shown.

The more timely payrolls figures showed the spike in hiring ahead of the reopening of indoor hospitality on May 17, double the pace of April and growing for the sixth month in a row.

Although payrollls remain 553,000 below pre-Covid levels, vacancies have soared as employers battle against shortages of workers.

The number of vacancies in the quarter to May was 758,000 - only 27,000 below March 2020. The strongest quarterly increase was in accommodation and food services. 

Unemployment, which has been artificially suppressed by the Government's furlough scheme, fell to 4.7pc in the quarter to April. Read our full story here. 

Good morning. The FTSE is tipped to open higher after Wall Street surged higher in the last hour of trading to close at another record.

Meanwhile unemployment fell to 4.7pc and firms created 200,000 new jobs as the economy opened up, fresh data has shown.

5 things to start your day 

1) Big tech faces scam advert crackdown with post-Brexit powers: Law changes triggered by Brexit could mean the City watchdog takes on big tech over online scams, top FCA official reveals.

2) Britain braced for 'biosimilar' boom with copycat drugs rules: UK set to become a more attractive destination for pharma companies after beating EU and US regulators with new guidance on human trials.

3) Pub chiefs warn staff cannot control customers after reopening delay: Beleaguered pub workers cannot be expected to force customers to obey lockdown rules after Boris Johnson delayed the final step of reopening.

4) Covid test maker Mologic set to sue Gov over 'stonewalling': Bedford-based firm is preparing to sue the Government over claims "stonewalling" by the state has stopped its kits from being approved.:

5) Bosses face home working clash with staff as new divide emerges: Bosses are on a collision course with staff over a shift to permanent home working as official figures indicate a looming clash when Boris Johnson calls for a return to offices.  

What happened overnight 

Most markets were mixed in Asia on Tuesday as traders struggled to track a record-breaking day on Wall Street, with the Federal Reserve's next policy meeting later this week in focus.

With Covid vaccines rolling out and businesses reopening in many countries, investors are broadly upbeat, while fears have eased that an expected spike in inflation will force central banks to taper ultra-loose monetary policies.

Hong Kong fell more than one percent as investors returned from a long weekend, with eyes on a nuclear plant across the border in China following a US report of a potential leak.  Shanghai, Seoul, Manila and Jakarta also slipped, though there were gains in Tokyo, Sydney, Singapore, Wellington and Taipei.

Coming up today

• Corporate: Ashtead, Telecom Plus, GB Group (Full year); On The Beach, Oxford Biodynamics (Interim); Bellway, boohoo (Trading statement)
• Economics: Unemployment and wage growth (UK), consumer price index (Ger), trade balance (EU), retail sales, producer price inflation, industrial production (US)