City Minister Bim Afolami said yesterday that he is taking the “long view” on China and that it is “profoundly” in Britain’s interests to “engage” with the hardline communist country where we can. “Like with any bilateral relationship, we don’t agree on everything, [but] we are very clear that you simply cannot give the cold shoulder to an economy that is home to a fifth of the world’s globally systemic important banks, four of the world’s largest banks, and almost a third of the world’s leading global financial centres. It just doesn’t make sense,” he told financial service industry leaders at the City Week Forum in London’s Guildhall. It is “crucial” to engage with strategic competitors such as Beijing, and that the UK risked losing control of its economic future if it failed to find common ground, he added, in comments that will be seen as contrary to the protectionist and arguably anti-China policies being introduced by President Joe Biden in the US, and ongoing investigations into Chinese trade practices by the EU. Afolami stressed that the UK “should only engage, of course, where it’s consistent with our interests. But be in no doubt that is absolutely not the same thing as disengagement.” “If we hesitate too much – as Lord Cameron, the foreign secretary himself, noted two weeks ago – our competitors will write our future for us,” he cautioned. Two weeks ago, it was revealed that 270,000 payroll records belonging to nearly all members of Britain’s armed forces had been exposed to Chinese hackers, and just over a week ago, China's ambassador to the UK was summoned to the Foreign Office after three people were charged with spying for Hong Kong. At the time, The Foreign Office said it was "unequivocal in setting out that the recent pattern of behaviour directed by China against the UK including cyber-attacks, reports of espionage links and the issuing of bounties is not acceptable". In March, a parliamentary researcher was arrested amid accusations he spied for China. Meanwhile…

China has responded to the imposition by the US of tariffs of up to 100% on Chinese imports by launching an anti-dumping probe into imports of polyoxymethylene copolymer, a widely used plastic sourced from the US, EU, Taiwan and Japan. China’s Ministry of Commerce also said President Biden’s actions will "severely affect the atmosphere for bilateral cooperation", and criticised what it characterised as the “politicisation” of economic issues. China will "take all necessary measures to safeguard its legitimate rights and interests," a spokesperson for China's foreign ministry also said. Yesterday, China also sanctioned three American defence firms over their sales of weapons to Taiwan: General Atomics Aeronautical Systems, General Dynamics Land Systems, and Boeing Defense, Space & Security are now banned from "import and export" business in China and the senior executives of all three companies forbidden to enter, work or live in China.

Sir Brandon Lewis, the former Northern Ireland secretary, has said the decision to block a United Arab Emirates-backed takeover of The Telegraph has damaged relations with the Gulf state. Writing for the newspaper, he said it “would be logical” if the handling of Redbird IMI’s bid had contributed to a diplomatic breakdown between the UK and UAE that puts billions of investment at risk, he said, adding: “I know that MPs and ministers who opposed the deal were at pains to say the UK valued the partnership with the United Arab Emirates and would still be keen for inward investment. But I can assure them that is not how it is perceived by the Emiratis, and it will take more than warm words to put this right”. The takeover plan ground to a halt when the Government announced new laws to ban foreign state ownership of UK newspapers, after an outcry about risks to press freedom because of the deal. Sir Brandon is a close friend and political ally of Nadhim Zahawi, the former education secretary and chancellor under Liz Truss, who acted as a broker in a deal for The Telegraph between its current owners the Barclay family and the UAE. Zahawi, who, like Lewis, is stepping down as an MP, had hoped to become chairman of The Telegraph under Redbird IMI’s ownership, He has since been appointed chairman of the Barclay family’s online retailer Very.

Ben Broadbent, a deputy governor at the Bank of England (BoE), said yesterday it was “possible” interest rates would be cut this summer, in line with market expectations. “If things continue to evolve with its forecasts – forecasts that suggest policy will have to become less restrictive at some point – then it’s possible the Bank Rate could be cut some time over the summer,” he said in a speech delivered at the Bank of England, his last as a member of the rate-setting Monetary Policy Committee. His comments come ahead of April’s inflation figures which are due to be released tomorrow. The expectation is that the consumer price index (CPI) will fall close to the BOE’s official 2% target, to 2.1% for April on an annual basis, down from 3.2% in March. Interest rates have been held by the BoE a 15-year high of 5.25% since August last year, after inflation peaked at 11.1% in October 2022. Also…

UK grocery inflation fell for the 15th month in a row in May to hit 2.4%, its lowest level since October 2021 and a “more normal” one, according to market researcher Kantar. Although Kantar’s data showed prices were still rising quickly for products such as chilled fruit juices and drinks, sugar confectionery and chocolate, the dip is another signal April’s CPI will have fallen when the official rate is released tomorrow. In March, when the CPI fell to 3.2%, food inflation had fallen to 4%.

London Stock Exchange (LSE) CEO Julia Hoggett labelled stamp duty on share trading “pernicious” yesterday as she spoke at the City Week Forum. She claimed the LSE had been weighed down because of the tax of 0.5% charge on UK share transactions. However, she also insisted that the negative publicity received by the LSE in recent months - around the number of firms delisting on the back of private equity takeovers, or of British firms choosing to list in the US - was overplayed, and that this gloomy “public narrative” was beginning to lift. “We’ve taken a much more confident position over the last several years in seeking to address some of the misconceptions that exist in the public narrative, and dare I say reporting, which I do believe is now becoming much more nuanced,” she told the conference, adding that if share trading was adjusted for the number of companies on the LSE, total trade was s comparable to the US. City firms including Abrdn, Peel Hunt, Revolut and Monzo have all lobbied for the stamp duty to be abolished, but without success as yet. The tax brings in around £3bn for the Treasury annually. Also…

HSBC has told its clients to buy UK-listed stocks, arguing that retirement funds which have pulled an estimated £1.9tn from the market over the past three decades, will be buying again amid political pressure to support the UK economy. “The long-term structural overhang of UK pension fund selling is at an end; they simply have no more UK equities left to sell,” the bank’s research team said, adding that a Labour victory in the upcoming election was unlikely to unsettle the stock market, thereby removing another potential roadblock for investors considering backing Britain, according to the Telegraph.

The Financial Conduct Authority (FCA) now says it will seek to reach a “broad consensus” across the financial services industry on its proposals to ‘name and shame’ companies being investigated at an early stage. To date, the FCA has stood firmly by its proposals, apparently subbing Chancellor Jeremy Hunt and members of the House of Lords who requested a rethink and an extension of the consultation period, by then doubling down in an article for City AM. Yesterday, however, FCA executive director Sarah Pritchard said the FCA wants its rules to "drive the right outcomes" and avoid "taking a hammer to crack a nut". "Confidence in the market is essential and that confidence is underpinned by a clear regulatory regime," she told a City & Financial conference, adding: "We recognise this is a sensitive and emotive issue, so we will take time to consider the feedback, to engage further with industry... with the aim of reaching a broad consensus".

The UK financial sector contributed record tax receipts to the Treasury last year, according to research conducted by PwC. Together financial services firms paid over £110bn in taxes last year,12.3% of total tax receipts, and enough to pay for the entire Education budget.

The number of properties available to rent in Britain has plummeted by 40% since April 2019 as more landlords sell up than buy, according to a report by estate agents Hamptons. In total, 163,000 privately rented properties disappeared from the market between 2019 and the end of 2023 Hamptons claims, with 140,000 landlords selling up and only 100,000 entering the sector. The Government has been waging a ‘war on landlords’ in recent years according to some, who cite numerous tax rises, the 3% stamp duty surcharge on second homes, and the tapered removal of mortgage interest tax relief. The Renters Reform Bill, currently making its way through Parliament, will also ban so-called ‘no-fault evictions,’ another issue – alongside soaring interest rates – that is deterring buy-to-let investors. Earlier this week, data from local councils showed that more than 2,000 households face homelessness every month in England due to landlords fleeing the sector. Ben Beadle of the National Residential Landlords Association said the only answer to the crisis was to “ensure responsible landlords have the confidence to stay in the market and sustain tenancies”.

Virgin Trains has told the BBC it had applied to the Office of Rail and Road for an Open Access licence to run rail services on the West Coast route between London and Glasgow, five years after it lost the franchise to Avanti West Coast. Virgin had operated the service for 22 years – the longest ever franchise - before it was disqualified from bidding for a new licence in a row over pensions. However, since taking over, Avanti has faced considerable criticism because of delays and cancellations. The Greater Manchester Mayor Andy Burnham called for Avanti to be stripped of the contract, saying it had left the rail service in a “perennial state of chaos” but, last year, the Department for Transport (DfT) renewed Avanti's contract for up to nine years. An Open Access licence means service providers do not receive any state subsidies or government contracts.  A spokesperson for Virgin Group said: "While this application is just the first step towards exploring what might be possible, we think Open Access is the way forward. Open Access increases consumer choice and competition both of which Virgin has always supported”. Sir Richard Branson said he was “devastated” when Virgin Trains lost the franchise in 2019.

Water Companies: Shareholders in some of the largest water companies in England and Wales have taken out £85.2bn from the top 10 water and sewage firms since the industry was privatised more than 30 years ago, but have failed to invest, new academic research claims. David Hall, visiting professor at the Public Services International Research Unit at the University of Greenwich, alleges that that water companies have invested "less than nothing of their own money" and are “treating their customers like a cash cow,” having examined the company accounts of the likes of Thames Water, United Utilities and Severn Trent. He claims that between privatisation in 1989 and 2023, money invested by shareholders in the largest firms shrunk by £5.5bn when adjusted for inflation, and that total amount paid out to shareholders in dividends grew to £72.8bn, when taking inflation into account. Industry regulator Ofwat said it "strongly refuted" the figures, in particular the dividend figure, which it said was "simply wrong". "While we agree wholeheartedly with demands for companies to change, the facts are there has been huge investment in the sector of over £200bn," a spokesperson said. Meanwhile…

Pennon Water, which owns South West Water, has said this morning it will pay £3.5m in compensation to water customers in Brixham, Devon, who have been affected by parasites contaminating their supply. The UK Health Security Agency said on Friday that 46 cases of cryptosporidium, a disease that can cause unpleasant symptoms such as diarrhoea and vomiting, had been confirmed in the town. The amount works out at around £215 pounds per household. Pennon has also slashed £2.4m off dividend payments to shareholders after receiving a £2.2m fine for illegally dumping sewage into rivers and the sea in Devon and Cornwall. An investigation by the Environment Agency found South West Water culpable for significant environmental harm. Pennon said the decision to reduce its total payout to investors by 0.84p a share to 44.37p showed “we are listening, clearing the way for long-term shareholder value”.

Cazoo, the British online car retailer once valued at well over £5bn, will crash into administration today, appointing insolvency practitioners Teneo, Sky News understands. Yesterday, the group's wholesale arm was sold to car auctioneers G3, and Constellation Automotive, the owner of Cazoo's rival, Cinch, has also acquired a number of assets from the indebted New York-listed company. More than 700 people have already lost their jobs as a result of the crisis at Cazoo. Teneo is expected to retain a number of staff to operate the remaining marketplace model while they explore a sale, Sky says. Parties which may be interested, one industry source told the newscaster, are BMW, Motorpoint and Car Gurus, as well as Motors.co.uk, a privately owned used-car platform. Cazoo was founded in 2018 by Alex Chesterman, the  entrepreneur behind Zoopla. Both Cazoo and Teneo declined to comment on Sky’s story.

Victorian Plumbing has bought rival online bathroom retailer Victoria Plum in a deal worth £22.5m. Some six months ago, Victoria Plum went into administration and bought by AHK Designs. Mark Radcliffe, CEO of Victorian Plumbing, said the deal was “another exciting strategic milestone” for the company that “aligns with our ambitions to accelerate our growth”. Victoria Plum had 300 employees when it was bought out of administration and Radcliffe said he was “pleased to welcome the existing Victoria Plum team to our group”.

Kainos, the IT firm that is one of Northern Ireland’s largest businesses and employs around 3,000 people, made a pre-tax profit of £77m last year, the BBC reports, a 14% increase on the previous year’s £68m profit. Turnover grew by 2%, from £375m to £382m. CEO Russell Sloan said it had been a "disciplined" performance against an uncertain economic backdrop.

Big Yellow Group saw revenue rise by 6% to £199.6m in the past year, driven primarily by a 7.5% increase in average achieved rents per square foot. The FTSE 250 self-storage firm said its statutory profit before tax surged to £241m - a significant increase from £75.3m in the prior year, largely due to a revaluation gain of £131.2m. Big Yellow has 109 units at present, but has committed to building seven more, and has also acquired further freehold properties that will increase its development pipeline to 12 sites. A further 14 stores already have planning approval.

TalkTalk founder Sir Charles Dunstone and other main shareholders in the debt-laden broadband provider have offered to inject £150m into the company to stave off a potential debt crisis, sources have told The Telegraph.

Former Chancellor Sajid Javid is said to be in discussion with Singapore-based fast fashion retailer Shein about joining the company ahead of its rumoured listing on the London Stock Exchange. According to Sky News, Javid is among a "number of senior City figures" who have been approached and had discussions with Shein's executive chair Donald Tang. Former BBC Trust chair Rona Fairhead was also on the list of candidates. The Bromsgrove MP, who served as Chancellor under Boris Johnson between 2019 and 2020, is not standing for re-election.

Former Libor trader Tom Hayes has had his application to take his case for overturning his criminal conviction to the Supreme Court denied. The Court of Appeal Judges hearing his case said it should be for the Supreme Court itself to decide whether the point of law he argues should be considered “in the light of the consistent series of decisions of the Court of Appeal”. Hayes, a former UBS and Citigroup trader was sentenced in 2015 to 11 years in prison after he was found guilty of conspiring to rig the London Interbank Offered Rate, known as Libor. He was the first person convicted in Britain of rigging the now-discredited financial benchmark. According to the Financial Times, the Serious Fraud Office is reviewing all Libor prosecutions since problems with the agency’s disclosure software systems came to light and forced it to revisit old cases. Conservative MP David Davis has been supporting Hayes, and said he believed it was “vital that the judges allow it to go to the Supreme Court.”

Bitcoin fraudster Craig Wright lost an attempt to prove he was the inventor of bitcoin in the High Court in March, and yesterday Judge Mr Justice Mellor handed down a written Judgement in which he said Wright “engaged in the deliberate production of false document to support false claims and use the Courts as a vehicle for fraud.” Wright has long claimed to be Satoshi Nakamoto, the author of the founding bitcoin white paper and inventor of the famed cryptocurrency. Mellor also said Wright is “not nearly as clever as he thinks he is” and that he is “entirely satisfied that Dr Wright lied to the Court extensive and repeatedly.” The evidence presented by Wright was “at best questionable or of very dubious relevance or entirely circumstantial and at worst, fabricated and/or based on documents I am satisfied have been forged on a grand scale,” he added, noting too that Wright failed to understand basic aspects of bitcoin technology and displayed an “arrogance” Nakomoto would not have made. The case was brought by a group of bitcoin and crypto companies who called themselves the Crypto Open Patent Alliance (COPA).

And finally…Despite shares being bought apace by his devoted fans, Donald Trump’s Trump Media and Technology Group (TMTG), which owns the Truth Social, the social media platform the former and wannabe future US President founded when he was booted off Twitter (now X) three years’ ago, has reported losses of over $300m (£236m) for the first quarter of 2024. TMTG’s market capitalisation is just shy of $7bn.

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