Key events
Next reports bumper sales, will raise prices overseas to offset higher costs
Sarah Butler
Next has revealed far stronger sales than expected in the UK in the three months to the end of April – up 4.4% instead of the 1.3% predicted – thanks to bumper sales during warm weather in February and March.
The company said it now expects full year sales to rise by 5%, including 1% growth in the UK where it anticipates prices will rise by no more than 0.6% as a result of higher costs linked to the Middle East conflict.
Outside the UK, it still expects strong growth but it will put prices up in the Middle East to offset higher costs of transport and energy linked to the conflict.
Next said it expected an additional £20m of costs to the UK business from higher freight, fuel and energy costs while the cost of delivering to the Middle East is expected to rise by £17m, with other overseas costs rising by a further £10m. Overseas costs will be offset by putting prices up by as much as 8% in the Middle East.
Prices will not rise in Europe, where most cost increases have been offset by currency gains. In the UK, price rises are being offset by cost savings including lower factory prices.
The retailer added £8m to its full year profit expectations taking the total to just over £1.2bn.
UK government bond yields dip after Tuesday’s surge to 28-year high
UK government bond yields have dipped slightly after Tuesday’s surge, which saw long-term borrowing costs surge to a 28-year high, limiting the chancellor Rachel Reeves’ room for maneouvre.
The yield, or interest rate, on 30-year gilts has slipped 5 basis points to 5.48%, after climbing to 5.8% at one stage on Tuesday and later settling at 5.74%, the highest since 1998.
The yield on the 10-year government bond also dipped 5 bps to around 5%.
Kathleen Brooks, research director at the investment platform XTB, said:
double quotation mark What made Tuesday’s sell off particularly worrying was that it happened in isolation. There was no major sell off in bond markets in the US or Europe, and UK yields also decoupled from the oil price; UK yields rose even as the price of crude oil fell.This suggests something else is triggering this sell-off, which explains why UK yields are being targeted more than their peers. Typically, when bond yields decouple from their peers it signals a rising local risk premium, such as a credibility issue and/or a potential funding crisis. This time, it also signals a rising political risk premium being added to UK yields.
Traders are watching local elections in Britain on Thursday, which are likely to add to pressure on Keir Starmer and raise questions over his future.
Meanwhile, spot gold has risen 2.4% to $4,666 an ounce.
The French shipping group CMA CGM said today that one of its vessels, the San Antonio, has been the target of an attack while transiting the strait of Hormuz, resulting in injuries among crew members and damage to the vessel (which might have prompted Donald Trump’s softening of tone).
The injured crew members from the attack, which happened on Tuesday, have been evacuated and are being provided with medical care, the company said.
double quotation mark CMA CGM is closely monitoring the situation and remains fully mobilised alongside the crew.
European shares rise; FTSE 100 gains led by Diageo
We are off to a good start in Europe too. The FTSE 100 index in London has jumped 1.5%, or 153 points, to 10,372 in early trading.
Diageo shares rose 4.6% (they were up 5.5% at the open) after the world’s top spirits maker, which also makes Guinness, posted surprise growth in quarterly organic sales, with strong performances in Europe annd Latin America offsetting weakness in the US, its biggest market.
The company stuck to its 2026 forecast and said it was mindful of the Middle East war’s impact on energy, suppy and distribution.
Mining (Anglo American, Antofogasta and Fresnillo) and banking stocks (Standard Chartered and NatWest Group) are also among the top risers in London.
The Italian borsa rose 1.3% while the French and Spanish markets climbed about 1%.
Introduction: Oil prices retreat and global stocks hit record highs after Trump hails ‘great progress’ on Iran deal
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Asian stock markets hit record highs, following in Wall Street’s footsteps, and oil prices retreated after Donald Trump hailed “great progress” towards a “final agreement” with Tehran.
Brent crude oil futures fell nearly 2% to $107.7 a barrel. The dollar lost 0.36% against a basket of major currencies.
The US president said last night he was pausing ‘Project Freedom’, the US effort to guide stranded vessels out of the strait of Hormuz launched on Monday, but added that his blockade of Iranian ports would remain in place. In a social media post, Trump said he made the move based
double quotation mark on the request of Pakistan and other Countries, the tremendous Military Success that we have had during the Campaign against the Country of Iran and, additionally, the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran”.
Iran is yet to comment.
MSCI’s All-Country World Index rose 0.56% to a new record while the broadest index of Asia-Pacific shares outside Japan leapt 2.8% at one stage, but then dipped 0.1%.
South Korea’s Kospi jumped nearly 8% through the 7,000 mark for the first time as the Seoul market reopened after a holiday. Samsung Electronics surged 15% which took its market value above $1 trillion, ahead of Warren Buffett’s investment firm Berkshire Hathaway and closing in on the retailer Walmart. Japan’s Nikkei rose almost 0.4%, Hong Kong’s Hang Seng added 0.8% and China’s CSI 300 and the Australian market were 1.3% ahead.
Stocks on Wall Street hit fresh all-time highs on Tuesday with the S&P 500 index up 0.8% and the tech-heavy Nasdaq Composite gaining 1% amid a wave of AI-driven trades.
Chris Weston, head of research at the broker Pepperstone in Melbourne, told Reuters:
double quotation mark Investors bought and continue to add to positioning in the 2026 winners. There has been some buying in S&P 500 materials stocks, but it’s tech that continues to attract the bulk of flows, notably in Apple and the memory plays.
The Agenda
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9am BST: Eurozone services and composite PMIs for April
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9.30am BST: UK services and composite PMIs for April
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1.15pm BST: US ADP employment change for April
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