- FTSE 100 climbs 60 points at 9,128
- Lloyds and Close Bros jump after Supreme Court motor finance ruling
- FCA proposes modest compensation scheme
4.40pm: That's all folks
The FTSE 100 ended the session just under 60 points higher at 9,128.3, reversing Friday's sell-off, but just off its all-time high. The domestically-focused FTSE 250, usually seen as a more reliable barometer of the health of the UK's corporate sector, ended 302 points, or 1.6% up on the day at 21,859.50.
4.11pm: London stocks on the up
The FTSE 100 looks to be finishing strong, up 0.6% as we sail into port for the day.
Lloyds Banking Group PLC (LSE:LLOY) remains top of the pile, up 8.5% as investors and analysts clamoured to back the lender after the friendly Supreme Court ruling after markets closed last week.
Financial sector names from wealth managers to banks and life insurer are dominating the blue-chip leaderboard, with St James's Place, London Stock Exchange, NatWest, Legal & General, Schroders, M&G, Aviva, Barclays and Phoenix Group.
Some of these names - not just Lloyds but also Barclays and with smaller lenders like Close Brothers, Secure Trust, Vanquis and S&U - got a boost from the motor finance ruling.
LSEG was lifted by warm words from analysts at Citi, who said investor selling was an overreaction to recent results.
UK gilt yields are falling, with yields on both sides of the Atlantic dropping to the lowest in over a month. US yields dropped sharply after the disappointing jobs numbers at the end of last week.
The London index was also lifted by a 1.8% gain for BP PLC (LSE:BP.) as the company announced its largest oil discovery in 25 years, offshore Brazil.
3.50pm: Trump moves markets
Donald Trump has been busy on his phone this morning, dashing out posts left, right and centre.
He has threatened higher tariffs for India and praised American Eagle Outfitters Inc's (NYSE:AEO) advert with Sydney Sweeney.
"India is not only buying massive amounts of Russian oil, they are then, for much of the oil purchased, selling it on the open market for big profits," the US President said.
"They don’t care how many people in Ukraine are being killed by the Russian war machine. Because of this, I will be substantially raising the tariff paid by India to the USA."
Sensex futures were higher, however, shares in American Eagle Outfitters Inc. (NYSE:AEO) bounced 14% after Trump hailed the clothing company's adverts starring actress Sydney Sweeney, who it was reported over the weekend is a registered Republican voter.
The President said she "has the 'HOTTEST' ad out there" and the "jeans are 'flying off the shelves'."
"On the other side of the ledger, Jaguar did a stupid, and seriously WOKE advertisement, THAT IS A TOTAL DISASTER," he said.
Jaguar Land Rover chief executive Adrian Mardell last week stepped down after three years in the role and 35 years at the company.
JLR said his retirement had been planned for some time, though no successor has yet been appointed.
The company last month announced plans to cut up to 500 management jobs in the UK and reported a drop in sales in the second quarter, caused partly by a pause on US exports due to tariffs, as well as the planned wind-down of older Jaguar models.
Under his leadership, the UK carmaker announced plans to move its cars to all-electric powertrains, and last year put out a series of new adverts under a reimagined logo and slogan 'Copy Nothing', which were branded 'woke' by right-wing social media commentators and media as some ads featured androgynous models in flamboyant clothing.
In his post, Trump said the Janguar CEO "resigned in disgrace, and the company is in absolute turmoil".
Jaguar, he said, should "have learned a lesson from Bud Lite, which went woke and essentially destroyed, in a short campaign, the company".
Bud Lite sales remain significantly below pre-backlash levels, after being boycotted by the right, though parent Anheuser-Busch InBev (AB InBev) has far from been destroyed, with revenue increasing last year.
Trump said the "market cap destruction has been unprecedented, with billions of dollars so foolishly lost", though the market cap of AB Inbev is essentially flat.
2.55pm: Wall Street rebound
US stocks opened firmly in the green on Monday, recovering ground after last week’s sharp declines triggered by disappointing labour market data.
The Dow Jones rose almost 1% and the S&P 500 gained over 1%, while the tech-laden Nasdaq led the charge, up 1.4%. The small-cap Russell 2000 advanced 0.75% to 2,183.
2.26pm: US rate cuts firmly on the table
Ahead of the US market open, markets are seeing higher chances of a Fed rate cut.
After the non-farm payrolls last Friday disappointed, with only 73k new jobs created and downward revisions to May and June that blindsided and sent stocks reeling.
The Bureau of Labor Statistics revealed that May and June were being revised lower by a massive 250k jobs.
"That opened the door for Trump to dismiss Erika McEntarfer, accusing her of 'rigging the numbers' to make him look bad," says market analysts Kenny Polcari at Slatestone.
"And that was all it took -- the algos tripped over each other racing for the exits. Stocks tanked. Bonds surged. Yields plunged. Crypto paused. And the VIX? It spiked 22%, blasting through all three trendlines."
"In the end, here’s what you need to know: the labor market is not as strong as it appeared -- and that revision all but cements the case for a rate cut in September (with October and December likely to follow). The only real question now is: will it be 25 basis points… or 50?
"In fact, the current odds now show a 75% chance of a cut in September. Some are even floating the idea of an intra-meeting cut -- meaning the Fed acts before the next scheduled meeting."
ING economist James Knightley also says US interest rate cuts could come sooner than you think.
"Donald Trump has been heaping pressure on the US Federal Reserve to cut interest rates.
"And, given the disappointing jobs report last week and weaker growth, he might get his wish in September.
"Inflation worries are a concern, but we wouldn't be surprised if we get a 25bp cut next month," says Knightley, adding that if they do cut then, it would be hard to see them pausing at subsequent meetings this year.
1.40pm: Economists object to Heathrow expansion
Economists have written to the government to raise concerns about the government’s airport expansion plans, after Heathrow Airport submitted plans to construct a third runway.
The letter was written to the Chancellor Rachel Reeves and Transport Secretary Heidi Alexander by 29 economists at UK, US and Australian universities, with signatories including 16 professors of economics at top UK universities.
Benefits of the government's plans to expand Heathrow are "at best uncertain", the letter said, with "no indications that the environmental and health impacts of airport expansion can be adequately mitigated".
Heathrow submitted a £49 billion investment plan, including a £21 billion proposal for a third runway and airfield infrastructure, to the UK government last week.
"The economic case for airport expansion is questionable from so many angles, but chief among them is the decline of business reliance on air travel," said Dr Alex Chapman, senior economist at the New Economics Foundation, who signed and helped co-ordinate the letter.
He noted that comprehensive recent assessments of airport expansion, conducted by government-appointed inspectors assessing the Gatwick and Luton proposals, both recommended refusal because the balance of benefits and costs did not stack up.
"As a bare minimum, the upcoming review of the Airports National Policy Statement must involve a thorough and independent impact assessment of Heathrow’s expansion and should consider other, lower-impact, alternatives."
12.27pm: FTSE gains ebb away
The FTSE 100 bullishness ebbed away in the past hour, (as England lost wickets and eventually the fifth test against India in what has been a great series).
London's blue-chip index is lagging other continental European markets by some way.
Medical and health stocks are dragging, with ConvaTec, Haleon, Smith & Nephew and AstraZeneca all down at least 1%.
Retailer Next, fluid engineer IMI, chemicals group Croda and pest controller Rentokil are also among the fallers.
11.59am: Tesla gives Musk new share bonus
Tesla Inc (NASDAQ:TSLA) granted chief executive Elon Musk a new pay package of 96 million shares, worth about $29 billion, as it seeks to secure his leadership after a court overturned his original record-setting deal.
Tesla shares rose over 2% in premarket trading following the announcement.
The award, revealed through a Form 8-k filing, is structured to gradually increase Musk’s voting power.
Earlier this year, a Delaware judge voided Musk’s previous $50 billion compensation plan, ruling the process was unfair to shareholders. Musk has appealed, arguing the decision was based on legal errors.
"This grant was made under the company’s long-term incentive program, which will further motivate Musk as CEO of TSLA to lead TSLA through this inflection point within the company’s growth story with Tesla now in the process of becoming an AI-first company", said broker Wedbush.
11.49am: Gap between winners and losers is wide in European earnings season
A review of the UK and European earnings season from Morgan Stanley has dropped into the inbox.
Around three-quarters of European market cap has now reported results for the past quarter, and while earnings beats are growing, the picture on guidance remains mixed, Morgan Stanley says in a new note.
A net 23% of companies have beat expectations on Q2 results, but the bank highlights that guidance remains cautious with only a +2% net skew to earnings over the next 12 months, far below the +26% seen in the US.
Bright spots include defence, telcos, banks, and real estate sectors, while downgrades and misses have been concentrated in tech hardware, semiconductors, materials, luxury and autos.
Price reaction from the market has been more negative than in prior quarters, with stocks facing post-results EPS downgrades seeing an 8.5% average drop on the day, compared to a 3.9% lift for those with upgrades. This is a sharp -4.6 percentage-point net skew, a reversal from the +3pp net skew seen in Q1.
While Europe’s earnings revision ratio is recovering from heavy downgrades earlier in the season, it remains negative at -9%, and lags the US by some margin, Morgan Stanley said, while reminding investors that FX effects are a major factor, with US earnings revisions now firmly in positive territory.
Analysts compare the current backdrop to the early 1990s Gulf War outset, pointing to lingering uncertainty from volatile oil prices and rising tariff tensions.
"Our playbook suggests uncertainty lingers, limiting the extent of recovery in business confidence, investment and, most of all, hiring and consumer confidence.
"For EU equities, this means sideways, choppy trading (with intermittent 5-10% drawdowns which ultimately get bought), low earnings growth, a sustained shift into resilient pockets of the market, and continued high stock level dispersion," they said, meaning the gap between winners and losers is wide.
The bank sees Europe trading sideways with intermittent 5-10% drawdowns and reiterates its below-consensus 2026 EPS growth forecast of just 2.2% versus the market’s 11.6%.
11.29am: Spotify increases pricing again
As England lose their second wicket of the morning to India in the cricket and achieve a reprieve on a third via review, Spotify Technology SA (NYSE:SPOT) has announced that it will raise some monthly subscription prices from September.
The Swedish streaming group said in a statement to investors that subscribers to its Premium service in "multiple markets" across South Asia, the Middle East, Africa, Europe, Latin America, and the Asia-Pacific region will be informed of the increase in the coming month.
It said it was raising prices as it plans to "continue to innovate on our product offerings and features and bring users the best experience".
The current price for Spotify Premium in the UK is £11.99 per month and will increase to £12.99 per month. In 2023 the price was increased, for the first time in 12 years, from £9.99 to £10.99, and again in May 2024 to the current level.
In the US is $11.99 per month, with C$12.69 in Canada and A$12.99 in Australia.
11.04am: A 'Duolingo moment' for chess?
World Chess PLC (LSE:CHSS) has launched a ranking or "player progression" system that its chief executive Ilya Merenzon called chess's “Duolingo moment”.
The system, called The Tower, on its WorldChess.com website that introduces public 'Floors' that reflect a player’s progress and also offers digital and physical rewards.
PRO members earn points faster and can reach exclusive upper Floors where they may compete against chess legends.
Chess is not the main game on the City's mind this morning; that'll be cricket.
Diary management on point this morning ???? pic.twitter.com/TWAl5GQ5u4
— Michael Brown (@MrMBrown) August 4, 2025
10.38am: Lloyds upgraded
Analysts have rushed to adjust their views on Lloyds.
RBC Capital Markets has gone perhaps the furthest, upgrading its rating to 'outperform' from its neutral stance before, after the Supreme Court's long-awaited motor finance judgement was handed down after markets closed last week.
With the conclusion being that there was no liability for the banks in "equity or tort", though as the analysts note, "depending on the facts there could be liability under statute".
RBC sees this a "clearing event" for Lloyds, even though the court ordered that the full commission should be repaid, with interest at an appropriate commercial rate, which has been confirmed by the FCA, which is expected to take a moderate approach when laying out its final redress scheme towards the end of this year.
Analysts at KBW also reduced their total motor finance litigation provision for Lloyds to £2 billion from £4.2 billion and increase their price target to 93p from 90p.
"Our previous motor finance liability estimate of £4.2 billion was based on the conservative assumption that the banks would lose the Supreme Court case."
Following the FCA's intervention, suggesting a total sector liability of £9-18 billion, this implies circa £2 billion for Lloyds, which has a 15% market share.
"Quite why regulators agreed LLOY £1.2 billion earlier in the year if they thought the liability was so much higher is not explained (LLOY have a long track record of understating litigation risk).
"That said, to be conservative we default to the higher FCA implied figure (£2.0bn), which is still £2.2bn (+3p a share) below our previous estimate."
9.41am: European stocks up strongly
The Footsie's getting going a bit now, up 0.4%, but stocks on the Continent are doing even better, with the DAX and IBEX up over 1%, and Italy's FTSE MIB up 1.5%.
Swiss stocks are under pressure though, after the US imposed tariffs of 39%, sending the SMI benchmark down by around 1.5%.
London's benchmark is being held back a bit by a fall in oil prices, hitting Shell PLC (LSE:SHEL, NYSE:SHEL), after OPEC+ announced plans to raise output by 547,000 barrels a day in September, as it continues with its plans to boost production and increase market share.
"Tariffs will continue to be a dominant market force this week," says market analyst Victoria Scholar at Interactive Investor.
Strategists at Citi said in a recent note that the recent global rally in equities "means market pricing for EPS growth looks extended, especially in the US. Combined with signs of economic slowdown, tariffs could raise questions over the sustainability of continued near-term equity market upside."
After the slew of banks and tech stocks reporting in the past two week, there are a few more in US earnings season this week, with semiconductor names AMD and Super Micro Computer, plus reports from Pfizer, Caterpillar, Uber, Walt Disney and Eli Lilly.
For UK investors, the Bank of England’s rate decision comes on Thursday and there are also results from London-listed names including BP, Diageo, Glencore and Legal & General (read more about the week ahead).
Neil Wilson at Saxo says markets are "seeing a bit of stabilization today from Friday’s outsize move to the downside", with US futures also higher.
On motor finance, his tuppenceworth is that it was "a broadly positive decision from the Supreme Court as far as the banks are concerned on the car financing case".
The industry-wide compensation scheme will cost lenders around £9-18 billion, according to the FCA, but the ruling "removed the risk of larger bills down the line".
"It’s more than they’ve set aside so far but less than some of the top-end estimates."
8.36am: Lloyds, Close Bros and S&U jump on Supreme Court ruling
As well as Lloyds, which is now up 7.2%, shares in Close Brothers Group PLC (LSE:CBG) have rocketed 22% higher and S&U PLC (LSE:SUS) up 14%.
Close Bros was one of the firms that brought the appeal to the Supreme Court.
Lawyer Katie Stephen, an expert on financial services interventions and investigations group at Norton Rose Fulbright, noted that the FCA estimates the cost of the redress scheme could be as high as £18 billion, although most individuals will receive less than £950 each.
Analyst Rae Maile at Panmure Liberum says the Supreme Court ruling "was much better than it might have been", with two cases thrown out.
"The problem is that the last ruling was upheld, and so there will be claims against the industry and the issue is beyond simply discretionary commissions."
The FCA consultation news includes "some good bits and some less good bits", he adds, with a range of possible final costs to the industry "which will include motor manufacturers we expect", of £9-18 billion "but with plenty of scope for other outcomes".
For Close Bros he says there "is a fighting chance that sufficient capital has been husbanded, aided by the exits from Winterflood and Asset Management, that there is still a future" and he said "we caution against excess optimism at this stage".
8.15am: FTSE 100 starts week modestly higher
The FTSE 100 has kicked off the week with a modest advance of 19 points to 9,087, not as much as futures were expecting.
Lloyds Banking Group PLC (LSE:LLOY) is top of the early risers, up 6% after the helpful Supreme Court decision on Friday.
British Airways parent International Consolidated Airlines Group SA (LSE:IAG) is next, along with easyJet, up 2.2% and 1.8%. IAG is receiving a belated reaction to its Friday trading update.
Fallers include precious metals miners, tobacco companies and consumer goods groups.
7.59am: 'Significant' oil discovery for BP
BP PLC (LSE:BP.) has announced its largest oil discovery in 25 years, offshore Brazil.
The well was drilled around 400 miles from Rio de Janeiro, in the 100%-owned Bumerangue block of the Santos basin, in a water depth of 2,372 metres.
It was sunk to some 5,855 metres total depth, and penetrated a hydrocarbon column of around 500 metres, with an estimated areal extent (2D area, in other words) greater than 300 square kilometres.
BP's production and operations chief Gordon Birrell called it a "significant discovery", saying it was "BP's largest in 25 years".
7.37am: Lloyds plays down motor finance impact
After Friday's Supreme Court judgment largely overturned a previous Court of Appeal ruling on car finance, Lloyds Banking Group PLC (LSE:LLOY) says it believes the impact is "unlikely to be material" for the company.
The UK's highest court ruled that, in many cases, commission payments could be legal, but some lenders did act unfairly due in part to the size of the commission they paid to motor dealers and how it was disclosed.
The Financial Conduct Authority issued a follow-up statement on Sunday, confirming its previous guidance proposing a redress scheme for customers affected, but with individual payouts not expected to be particularly large.
A consultation will be launched on the redress scheme for discretionary commission arrangements (DCA) and to decide which non-DCA arrangements and other factors should be included.
Lloyds said in a statement that there remain "a number of uncertainties" and there could be "further interventions", but "the group currently believes that if there is any change to the provision it is unlikely to be material in the context of the group".
7.22am: Earnings revisions
So far, 66% of S&P 500 companies have reported so far this earnings season, according to Fact Set, with 82% posting positive EPS surprises and 79% reported better-than-expected revenues.
Earnings growth stands at an average close to 10%, compared to the 5-7% that was expected based on guidance and forecasts.
"The issue now is guidance," says Ipek Ozkardeskaya at Swissquote Bank. "Outside of AI, it’s not great.
"Many companies are warning that tariffs could weigh on future results.
"So maybe, just maybe, those S&P 500 record highs are a bit exaggerated in the current broader context."
7.16am: FTSE 100 to bounce back after tariff selloff
The FTSE 100 is likely to bounce back at the start of the week, after the last one finished with a widespread sell-off as US 'reciprocal' tariffs were confirmed for many countries and Donald Trump sacked one of the country's chief statisticians.
London's blue-chip index has been called 39 points higher ahead of trading beginning on Monday, after it ended last week with a fall of just over 64 points to finish at 9,068.58, down 0.7% on the day.
This was one of the best performances around the world, with Germany's DAX plunging 2.7% and France's CAC 2.9%, while Wall Street's Nasdaq and Russell 2000 both finished more than 2% lower, with the S&P 500 and Dow Jones falling 1.6% and 1.2%.
After weak US official jobs data on Friday, with 73,000 nonfarm payroll gains for June far below expectations, President Trump fired the chief of the Bureau of Labor Statistics (BLS).
"What likely enraged Trump was the revisions," says market analyst Ipek Ozkardeskaya at Swissquote Bank, with the NFP report including a sharp downward adjustment of 258,000 jobs from the previous two months, which "completely reshaped the narrative of a resilient labour market".
Taken together, the three-month average job gain fell from 150,000 to just 35,000, which is halfway to a rule of thumb that if the US sees NFP figures under 50,000 for six months in a row it's considered a recession signal.
After the jobs report, the probability of a September Federal Reserve rate cut jumped from 38% to above 80%, with US 2-year Treasury yields dropping sharply from near 4% to below 3.70%.
"But the bad news is that a weak economy wasn’t part of Trump’s promise. Cutting rates at the wrong moment won’t magically rescue markets, and scapegoating the BLS for the outcome of his administration’s chaotic policies risks damaging the credibility of US economic data," says Ozkardeskaya.
However, she notes that the earnings season is going well for big tech in particular, as strong AI demand and a softer dollar have led to better-than-expected results.
Announcements on Monday 4 August
Clarkson PLC (LSE:CKN) shares were at all-time highs early this year, before sinking by a third as the shipping services group lowered its outlook due to the effects of global trade tensions and currency headwinds.
Last time we heard from the FTSE 250-listed group, it gave pre-tax profit guidance for between £85 million and £95 million, compared to £115.3 million last year.
Its updated perspective should be of interest to many.
Announcements expected:
Interims: Clarkson, Kosmos Energy, Senior
Overseas announcements: Palantir, MercadoLibre (afterhours)
Economic announcements: Factory orders (US)