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What recession?

Plus, ONS to change how it measures supermarket prices, X sues major advertisers, how Keely Hodgkinson went from silver to gold and keeping politics out of the workplace

Trader at work on the floor of the New York Stock Exchange (Image: Michael M. Santiago/Getty Images)

By Josh Dornbrack

Financial markets around the world have rebounded after the drops seen on Monday, with UK and US stocks recovering some of their losses.

The FTSE 100 closed higher on Tuesday and was up another 1 per cent during trading on Wednesday morning. In the US, the S&P 500 and Nasdaq closed up 1 per cent on Tuesday.

The sell-off on Monday – which included the FTSE 100 experiencing its biggest fall in a year – was sparked by new concerns that the US economy could fall into recession. However, analysts at Goldman Sachs and JPMorgan have put the chance of a recession in the US at 25 per cent and 50 per cent respectively.

New data from the UK shows that the construction industry has gone from strength to strength post-election. The closely monitored S&P Global purchasing managers’ index has found that activity in the country’s construction sector rose from 52.2 in June to 55.3 in July, its fastest pace for more than two years. Some of the factors attributed to the rise are a reduction in political uncertainty post-election, along with the new government’s firm commitment to reinstating annual housing targets and easing the planning system.

According to the report, all three categories of construction saw activity increase in July as work on housing projects returned to growth. Commercial activity increased solidly, but the fastest expansion was seen in civil engineering activity, where the rate of growth quickened to the sharpest in almost two-and-a-half years.

Halifax’s house price index has also revealed that average house prices in the UK have increased by 0.8 per cent month on month in July. The average house price is £291,268, up more than £2,200 compared to the previous month. The report, which is the UK’s longest-running monthly house price series, also found that the annual growth rate of 2.3 per cent is the highest since the start of this year.

The lender expects that the Bank of England’s decision to cut the interest rate to 5 per cent last week could lead to house prices continuing a “modest upward trend” in the rest of this year. Amanda Bryden, head of mortgages at Halifax, says: “However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.”

While the new government has received plaudits for steadying the ship, the first real test of its pledge for economic growth will come in Rachel Reeves’s first budget as chancellor in October. An independent think tank has poked holes in the government’s annual growth target of 2.5 per cent.

The National Institute of Economic and Social Research (NIESR) says that the goal is unattainable without an increase in investment of £50bn a year. This equates to around 5 per cent of GDP, up from the current 2.5 per cent.

NIESR also highlights the need for investment in housing, transport, education and skills to stimulate private sector investment, which is currently lower than the OECD average. It warns that cutting capital spending could undermine long-term growth prospects.

You can read more on this here.

Business Agenda

A summary of the most important business news

By Sarah Vizard

1. X is suing several major advertisers, including Unilever and Mars, alleging they are unlawfully conspiring to boycott the site. X claims the companies, along with the trade association the World Federation of Advertisers, are depriving it of billions of dollars in ad revenue. Many advertisers have pulled investment from X amid concerns over harmful content on the site. You can read more here.

2. The Office for National Statistics is introducing a new system for measuring inflation in the grocery sector from next year. The change will see the organisation gather price data from more than 1 billion grocery items each month using supermarket scanners. Currently, ONS price collectors go into stores to gather prices, meaning it can cover only 25,000 prices per month. You can read more here.

3. The Royal Mint has built a large industrial plant on its site in Llantrisant in Wales so that it can extract gold from electronic waste to use in commemorative coins. E-waste, which includes old phones, computers and TVs, is a growing problem with the UN saying 62 million tonnes was thrown away in 2022. “What we’re doing here is urban mining,” says head of sustainability Inga Doak. You can read more here.

4. Airbnb has warned that third-quarter revenue will be below expectations as it flagged weakening demand in the US and shorter booking lead times globally. The latter is an important metric in the travel industry that refers to the number of days between when people book a holiday and when they go on it. Shorter booking windows often indicate consumers are booking travel last minute, which suggests caution in spend. Booking.com previously said it was seeing the same trend. You can read more here.

5. The fashion brand SeaSalt is preparing to expand into the US after seeing profits jump in the past year. The company says it plans to open 20 stores across the Atlantic over the next three years. Its pre-tax profits increased to £6.7m in the year to January 27, 2024, up from £470,681 in the prior year. Turnover increased from £118.8m to £132.6m over the same period. You can read more here


Business Question

Guess the year

  • Tea rationing officially ends
  • The world’s first commercial nuclear power station opens at Calder Hall in Cumbria
  • Austin-Healey, Russell Hobbs and Holiday Inn are founded
  • Initial discussions between the UK and France about the development of the supersonic Concorde aircraft began
  • Premium Bonds officially launch
  • Philip Green, Rex Tillerson, Liam Neeson and Viv Richards were born

The answer can be found at the bottom of the page.


Business Thinker

Deep dives on business and leadership

By Graham Ruddick

✂️ Axios makes first-ever job cuts and tells staff in unique style

The fast-growing US media group Axios, which specialises in newsletters and live events, is cutting 50 jobs. It told staff about the cuts in a unique way – through the “smart brevity” format that has become the Axios trademark (lots of sub-headings and bullet points in an email). Jim VandeHei, chief executive of Axios, said he wanted to give staff the “unvarnished context”, but it hasn’t gone down particularly well…

🚑 Keely Hodgkinson: ‘A tumour at 13 was quite scary’ 

There are some great pieces around today about how Keely Hodgkinson went from perennial runner-up to winning the gold medal in the 800 metres at the Olympics, including this piece from The Times. There is a fascinating quote from Jenny Meadows, Hodgkinson’s coach, about how determined the runner was to go from silver to gold. “I didn’t want to face the wrath of Keely if she only — I say only — got the silver again,” she says.

🗳️ It’s getting harder for companies to keep politics out of the workplace

An interesting analysis from The Wall Street Journal about how businesses are struggling to keep politics out of the workplace and what this means. The piece considers the forthcoming US election but is also relevant to the UK. “As neighbourhoods become more segregated politically, you just don’t meet people from different sides of the aisle,” says one CEO. “The workplace is one of the last bastions to do that.”


Business Quote

Inspiration from leaders

“Strange as it sounds, great leaders gain authority by giving it away.”

– Vice Admiral James B. Stockdale


Business Leader

The best of our content

LONDON, ENGLAND - JUNE 01: Carlo Ancelotti, Head Coach of Real Madrid, celebrates victory as he acknowledges the fans after Real Madrid defeat Borussia Dortmund during the UEFA Champions League 2023/24 Final match between Borussia Dortmund and Real Madrid CF at Wembley Stadium on June 01, 2024 in London, England. (Photo by David Ramos/Getty Images)
(Image: David Ramos/Getty Images)

Adaptability over ideology: How Carlo Ancelotti has redefined leadership

In an era where pragmatism reigns, sport remains a realm of philosophical fervour, particularly in football. While Pep Guardiola’s tactical principles dominate, Real Madrid’s Carlo Ancelotti stands out for his relatively unconventional approach.

Ancelotti, with a staggering five Champions League titles as a manager, eschews rigid tactics in favour of adaptability, emotional connection, and pleasure. His belief in the human aspect of football, cultivating a joyful and intimate team environment, and his willingness to adapt highlight a unique leadership style.

This article from the director of the Institute of Sports Humanities, Ed Smith, explores Ancelotti’s quiet yet effective philosophy and what it teaches us about success beyond strategy. You can read it here.

Other popular pieces

✍️ 7 leadership lessons UK business owners can learn from across the pond

🔥 The pitch from hell (and how to avoid it)

🧠 How to preserve tacit knowledge


And finally…

Cole Hocker crosses the finish line of the Men's 1500m final ahead of bronze medallist Yared Nuguse, silver medallist Josh Kerr and Jakob Ingebrigtsen
Cole Hocker crosses the finish line of the men’s 1500-metre final ahead of bronze medallist Yared Nuguse, silver medallist Josh Kerr and Jakob Ingebrigtsen (Image: Michael Steele/Getty Images)

One of the most hotly anticipated showdowns of the Olympic Games took place last night but the 1500-metre race did not go as many expected. Josh Kerr of Team GB and Jakob Ingebrigtsen of Norway had been engaged in a war of words for the best part of 12 months – Ingebrigtsen claiming he could beat Kerr blindfolded and Kerr jabbing back saying Ingebrigtsen had a “pretty high ego” and was surrounded by “yes-men”.

While all the focus was on the pair, Cole Hocker had other plans. The Team USA athlete took advantage of the cat-and-mouse game between Ingebrigtsen and Kerr to put in a remarkable performance in the final 300 metres, proving that narratives can be misleading and reminding us of the unpredictable nature of athletics.

It’s also a lesson in always being aware of where your competition could be coming from. Ingebrigtsen, in particular, was so focused on Kerr that he failed to consider that someone else could take the title. There’s a lesson for business leaders in that…

You can read The Guardian‘s interesting analysis of what happened at the Stade de France here.


The answer to today’s Business Question is 1952.

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