Business news live: Rachel Reeves reacts to ‘disappointing’ GDP figures, more lenders join sub-4% mortgage fight

The FTSE 100 had enjoyed a good week on the rise but it’s all coming to an end today.

Between poor economic data, more tariff turnarounds and general fatigue, looks like investors are exiting positions en masse ahead of the weekend.

Around a 0.5 per cent drop for the FTSE 100 today so far – in Europe it’s even bigger, with France and Germany seeing their main index down 0.9 per cent or more.

“The UK economy being stuck in the mud and the threat of high tariffs on Canada won’t be a shock to markets, but they are hard to ignore,” said Dan Coatsworth, investment analyst at AJ Bell.

“European indices are in the red and futures prices imply Wall Street will follow the same path when it opens for trading.

“Whether this is investors being reminded of headwinds or simply pausing for breath, it’s clear that uncertainty will prevail well into the summer.

“The corporate reporting season begins in earnest next week with the big US banks. That will shift the focus to profits and outlook statements, giving valuable insight into how the business world is coping with a multitude of pressures. Any corporate optimism is likely to prompt a tickertape parade on the markets as investors look for confirmation that tariff uncertainty hasn’t caused widespread damage to earnings.”

Rachel Reeves has put her plans to reform cash ISAs on hold after speculation that she was considering reducing the allowance for tax-free cash savings was met with criticism from banks and building societies.

Savers have a £20,000 annual allowance which can be split across ISA types, but the most frequently used version is the cash ISA, which gives people a tax-free savings account. However, the government wants to encourage more people to start investing, to generate better long-term returns.

Next week, the chancellor was expected to use her Mansion House speech to cut the limit on how much money could be put in the cash ISA product annually and potentially announce changes to the Lifetime ISA too, but that reform will now have to wait, with reports saying Ms Reeves wants to continue to consult with industry experts amid conflicting ideas on how to proceed.

The Investment Association has published a report with four key findings in pursuit of better retirement solutions for people.

Those recommendations include:

• Better support for pension contributors who don’t get individual financial advice (so, many of us who are on workplace pensions)
• For advisers to develop better risk practices for people’s risk and loss possibilities in retirement
• Ensuring value for money in retirement
• Reform of rules to allow better retirement-oriented products

Much of this involves changes for firms in the investment industry but with recent law changes over how much guidance can be given to people who don’t get actual paid-for financial advice, the emphasis continues to be a gradual shift towards helping people point toward better long-term decisions and returns.

UK exports to the US returned to growth in May, official figures show, after the two countries agreed a trade deal that softened the blow of President Donald Trump’s tariff hikes.

This followed a steep drop in April when exports declined by £2 billion – the largest monthly decrease since records began in 1997.

The value of goods shipped across the pond nonetheless remained relatively low in May, the ONS said.

The price of bitcoin has hit a new all-time high, reaching above $118,000 (£87,000) for the first time in its history.

The latest rally comes despite global economic and geopolitical uncertainty, leading to speculation that investors are increasingly viewing the world’s most valuable cryptocurrency as a safe-haven asset like gold.

So what caused this shift in attitude, and where will bitcoin’s record-breaking rally go from here?

Anthony Cuthbertson explains…

Talk of cash ISA allowance reductions has been met with fierce resistance, with Coventry Building Society now explaining why it could net the Treasury a significant amount – but cost people even more.

Jeremy Cox, head of strategy at Coventry, said: “Savers are facing a double hit. First, frozen tax thresholds are quietly dragging millions into higher tax brackets. Now, the potential cut to the cash ISA limit risks punishing those who simply do the right thing by putting money aside.

“For many – especially the half a million people expected to move into higher-rate tax next year – the blow will be even harder. With their Personal Savings Allowance slashed in half, they’ll either pay more tax on their savings or be pushed toward riskier investments they may not fully understand.

“Interest earned outside an ISA counts toward total income — meaning even modest savings can pull people into a higher tax band without them even realising.

“For example, a basic-rate taxpayer earning £50,000 who receives £1,000 in interest from non-ISA savings would tip over into the higher-rate bracket. This shift halves their Personal Savings Allowance, meaning the remaining £500 of interest is taxed at 40%, costing them £200.

“The Treasury may gain billions from these changes, but it’s responsible savers who’ll end up footing the bill through higher taxes on their hard-earned money.”

A slow start to the day for the FTSE 100, down 0.08 per cent.

BP is the biggest riser so far, up 2.5 per cent, but there’s a lot more red than green across those hundred companies on Friday.

That said, it has generally been a strong week for the index of the biggest UK firms.

Overnight, Asian stocks were mostly up except Japan’s Nikkei 225, which took another hit.

With interest rates still projected to fall slightly across the rest of this year, the forward-looking mortgage market has seen lenders slash rates in a bid for custom.

Well over 1.5m people are expected to renew mortgage deals across 2025, making it a key time for custom for the biggest banks and building societies.

As of today, two more products have been cut by Barclays to sub-4 per cent interest rates, joining the likes of NatWest and HSBC in offering such low repayment terms.

As David Stirling, director at Mint Mortgages & Protection, notes however – you do need a sizeable amount of cash in your pocket to benefit from the very best deals.

“The mortgage market is heating up as many major lenders deliver back-to-back rate cuts, signalling fierce competition ahead as borrowing costs tumble,” he said. “Momentum is really gathering pace this week as Barclays, Leeds and TSB enter the fray and announce rate cuts, with many sub-4% deals now available – if you’ve got a chunky deposit.”

Bitcoin has shot up again, with a six per cent rise putting it to a new all time high.

That put it briefly above $118,000, though it has now fallen back slightly to $117,500, still well above the $107-109k band it travelled along at for some time.

Our tech expert Anthony Cuthbertson notes that the new record puts bitcoin’s market cap above $2.3 trillion, ranking it above tech giants like Alphabet and Meta. While still only a fraction of gold’s estimated market cap of $22 trillion, it has now overtaken silver.

On those economic figures, chancellor Rachel Reeves said:

“Getting more money in people’s pockets is my number one mission. While today’s figures are disappointing, I am determined to kickstart economic growth and deliver on that promise.

“The choices we have made in our first year in government have seen us extend the £3 bus fare cap, fund Free School Meals for over half a million more children, press ahead with plans to deliver free breakfast clubs for every child in the country and increase the National Minimum and National Living Wage, giving a pay rise to 3 million workers.

“There’s more to do, that’s why in the Spending Review we boosted investment and jobs, through better city region transport and record funding for affordable homes, as well as backing major projects like Sizewell C.”