Oil on course for biggest monthly gain since early 2022

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Oil is on target for its largest monthly gain since early 2022 after cuts to supply by Saudi and Russia triggered a surge in prices.

Brent crude and West Texas Intermediate are both on track to end July with their largest monthly gains since January 2022.

Global benchmark Brent crude is currently trading over $85 per barrel and is up 13.7pc on the month. US crude benchmark West Texas Intermediate has surpassed $81 per barrel and has risen 16.4pc this month.

Record high demand has created upward pressure on oil prices as production cuts from oil producing countries threatens to further tighten global supply.

Saudi Arabia is expected to extend its voluntary reduction of 1 million barrels per day beyond August, according to analysts. Meanwhile, oil cartel OPEC+ last month agreed to limit oil supply into 2024.

Russia’s deputy prime minister Alexander Novak has also said that the top producer will cut crude exports by 500,000 barrels per day next month.

That’s all from me. We’ll see you again first thing tomorrow morning. Until then, I’ll leave you with the latest stories:

Northern Ireland’s airports have urged lawmakers to end the “unfair” post-Brexit ban on duty-free shopping.

George Best Belfast City Airport, Belfast International Airport and City of Derry Airport have jointly urged the UK Government and EU to restore duty-free shopping for passengers travelling from Northern Ireland to the bloc.

Airport bosses in the region have claimed that such restrictions on tax-free spending have resulted in losses of £5m each year.

Rishi Sunak’s Windsor Framework, which outlined the trade rules for Northern Ireland following Brexit, failed to address the ban.

UK Travel Retail Forum chairman Nigel Keal, who is leading the campaign, said: “Preventing airports and businesses in Northern Ireland from accessing this revenue stream is unfair. It puts them at a competitive disadvantage to the rest of the UK, and to the rest of Europe.”

Consultancy firm Accenture is planning to layoff almost 900 staff in Ireland as part of cost cutting measures.

The Dublin-based professional services firm is set to begin a redundancy programme that will impact 890 members of its Irish workforce. Accenture currently employs more than 6,000 people in the region.

It comes after the IT services and consulting specialist announced in March plans to reduced its worldwide headcount by about 2.5pc - equal to 19,000 jobs - over the next 18 months.

An Accenture spokesman said:

Our business in Ireland continues to show strong performance and we remain focused on our strategy to be at the centre of our clients’ business and help them reinvent themselves to reach new levels of performance.

We continue to focus on ensuring we have the right talent to serve our clients, to invest in our people and recruit in critical skills areas. We remain firmly committed to our business in Ireland and will continue managing for the long-term.

The FTSE 100 has closed 0.06pc higher at 7,699.41 lifted by energy giants BP and Shell after Rishi Sunak announced hundreds of North Sea oil contracts would be granted.

BP finished 1.6pc higher at 483p, while Shell ended up 1.05pc at 2,369p.

The blue-chip index has grown by 1.92pc this month, climbing to levels last seen in May.

Oil is on target for its largest monthly gain in 19 months after Saudi supply cuts caused prices to soar.

Brent crude and West Texas Intermediate are both on track to end July with their largest monthly gains since January 2022.

Record high demand has created upward pressure on oil prices as production cuts from oil producing countries threatens to further tighten global supply.

Saudi Arabia is expected to extend its voluntary reduction of 1 million barrels per day beyond August, according to analysts.

Meanwhile, oil cartel OPEC+ last month agreed to limit oil supply into 2024. Russia’s deputy prime minister Alexander Novak has also said that the top producer will cut crude exports by 500,000 barrels per day next month.

The UK’s competition watchdog has called for public responses on Microsoft’s revised $69bn takeover of Activision Blizzard by the end of the week.

The Competition and Markets Authority (CMA) has invited comments on Microsoft’s deal, which the US tech giant said should be revisited following legally-binding commitments to the European Commission and a licensing deal with Sony.

In arguments published on Monday, Microsoft said its agreements with NVIDIA, Boosteroid and Ubitus to licence Activision games for a decade after the merger had already boosted competition in the cloud gaming market.

Microsoft also said any breach of its commitments would breach European approval and leave it open to fines of up to 10pc of its worldwide turnover, which would amount to $19.8bn if based on its 2022 turnover.

The deadline for comments is Friday.

Hong Kong’s economy shrank in the second quarter as tourists stayed away and it suffered from China’s poor recovery from pandemic lockdowns.

Deputy economics Tim Wallace reports:

The city’s GDP declined by 1.3pc between April and June 2023, marking a sharp reversal from the 5.4pc expansion which greeted the pandemic reopening in the first three months of the year.

It is a return to the short-lived fits and starts of growth which have blighted Hong Kong’s economy since the rallies against authoritarianism four years ago.

Visitor numbers are still around 40pc below their levels in the early part of 2019, according to Capital Economics, before the widespread pro-freedom protests which hammered the economy even before Covid struck.

Read the full story here...

That’s all from me today. Adam Mawardi will eagerly keep you informed as you head into the evening.

Stocks are drifting on Wall Street as markets roll toward the close of another winning month.

The S&P 500 was up 0.1pc in early trading and on track for a fifth straight month of gains, which would be its longest streak in nearly two years.

The index is still close to its highest level in nearly 16 months after rallying on hopes cooling inflation will mean the economy can avoid a long-predicted recession.

The Dow Jones Industrial Average was also flipping between modest gains and losses and was up 0.1pc. The Nasdaq Composite was 0.2pc higher.

A quick market update as the FTSE 100 recovers from a slow start to end the day - and the month - higher.

The UK’s blue chip index has gained 0.2pc today, lifted by energy giants BP and Shell after Rishi Sunak announced hundreds of North Sea oil contracts would be granted.

The FTSE 100 is on course to end the month 2.6pc higher - its biggest gain since April.

The FTSE 250 has gained 0.3pc today after earlier falls - and is on track to end July 3.7pc higher.

The Government would save about £1bn a year if the Bank of England copied the European Central Bank and cancelled interest on some of the money it controls, according to analysts.

The ECB last week said it would stop paying commercial banks interest on some €165bn (£141bn) of deposits they are required to keep at the central bank as a minimum reserve.

Numis analyst Jonathan Pierce calculated that an equivalent “minimum reserve requirement” in the UK would be £20bn, on which the Bank of England is currently paying 5pc interest – or about £1bn a year.

The move if adopted would ease strains on the Treasury, which has indemnified the central bank against losses.

The Bank of England is paying increasing costs on reserves it holds for banks, which reached almost £1trn during the quantitative easing stimulus program that finished in 2021.

Those losses are ultimately borne by the taxpayer under a state-backed guarantee for the costs the Bank of England racked up with the quantitative easing assets it started buying in 2009.

Pressure groups including Positive Money have said the Bank should cancel the interest payments on its reserves or that the Government should impose a windfall tax to capture what it describes as “unearned profits” by the banks.

The Bank has refused to address the issue, saying scrapping interest payments on reserves would effectively be a tax on the banks and was therefore a decision for the Government. The Government says it’s an issue for the Bank.

Wall Street stocks edged higher ahead of another busy week of earnings reports from the likes of Apple and Amazon.

The Dow Jones Industrial Average was up less than 0.1pc to 35,476.29, while the broad-based S&P 500 had climbed 0.2pc to 4,591.06.

The tech-heavy Nasdaq Composite had climbed 0.2pc to 14,338.30.

Building products supplier Marshalls is axing around another 250 jobs and closing a factory in Scotland after sales dived due to a housing market slowdown.

The group said the cuts come as part of plans to save £9m a year, which will see it shut a factory in Carluke in South Lanarkshire, while also reducing shifts and production at other sites and restructuring its commercial team.

The role reductions add to about 150 job losses at the end of last year.

Marshalls - headquartered in Elland, West Yorkshire - announced the latest jobs cull as it warned over full-year profits, with a result in the final six months set to be “markedly” lower than the first half and dashing hopes of a recovery.

The alert sent shares in Marshalls tumbling by as much as 10pc.

Marshalls said like-for-like sales slumped by 13pc in the six months to June 30, while it expects to report a 27pc slump in interim underlying pre-tax profits, to around £33m.

Higher beer prices are starting to put drinkers off, Heineken has warned, as the world’s second largest brewer sold almost 6pc less in the first six months of the year.

Our retail editor Hannah Boland has the latest:

Heineken, which also makes Birra Moretti, Tiger and Beavertown brands, said efforts to pass through higher costs to customers hit demand and caused its profits to slump by more than a fifth.

Prices for shoppers in the UK for Heineken beers now are, in some cases, up by around a third compared to where they were last year.

A 650ml bottle of Heineken now costs £2.40 at one major British supermarket, up from £1.79 this time last year, and has gone from £2.25 to £2.75 in another.

Heineken said customer demand had taken a hit, particularly in Vietnam, and cut profit forecasts for the year. It now expects operating profits to either stay flat or rise by mid-single digits, not a rise of mid to high-single digits which it previously suggested.

Shares slumped by more than 5pc on the update, sending Heineken to its lowest level since February.

Former Virgin Money boss Dame Jayne-Anne Gadhia’s money-saving app Snoop has been sold to a specialist bank, four years after launching.

Vanquis Banking Group said it had acquired the fintech platform for an undisclosed sum.

The takeover is expected to help Snoop grow by bringing it under the ownership of the banking group which has 1.7m customers, and focuses on consumers who have been declined credit from high-street lenders.

The budgeting app, which uses Open Banking to let people track their bank accounts and spending from different providers in one place, was founded by British businesswoman Dame Jayne-Anne Gadhia in 2019.

The standard app is free to use, but a £4.99 monthly subscription service to Snoop Plus gives users more features such as creating unlimited spending alerts and custom spending reports, or tracking total net worth.

It pledges to target savings of up to £1,500 a year for customers through saving and budgeting.

Dame Jayne-Anne served as the chief executive of bank Virgin Money from 2007 until 2018 when it was acquired by Clydesdale Bank owner CYBG.

Rishi Sunak visited the Shell St Fergus gas plant in Peterhead in Aberdeenshire after he confirmed the backing for two further carbon capture and storage (CCS) projects today, including the Acorn project in the north east of Scotland.

CBI Scotland director Tracy Black said:

Carbon capture and storage represents a multi-billion pound economic opportunity for the UK and is crucial to decarbonising our industrial base.

The UK has assets and expertise in CCUS that other countries would struggle to match.

The backing of the Acorn and Viking clusters is an important step for the industry that will crowd in huge amounts of private sector investment – now we need to get on with delivery.

While businesses back a rapid transition to clean power and heating, the recent energy crisis has underlined the importance of security and affordability as well.

Oil and gas will form an important part of the UK’s energy system for many years to come, with the North Sea Transition Deal providing an effective blueprint for managing our domestic resources while bringing forward investment in clean technologies.

Shares of midcap UK oil and gas companies have risen Rishi Sunak said he would grant hundreds of new licenses for firms operating in the North Sea.

Analysts at Redburn said the Government is hinting at a “more pragmatic regulatory approach” as the Prime Minister also approved two major carbon capture projects.

On the London Stock Exchange, Serica Energy had gained 6.9pc, moving higher for a 10th straight day - a record winning streak.

Harbour Energy was up 4.6pc and Energean rose as much as 3.5pc, while Enquest had moved 2.9pc higher.

Brent crude has gained 0.7pc in London to more than $85 a barrel.

Downing Street was asked about a tweet by Conservative Party chairman Greg Hands last year which suggested extracting more North Sea gas would not lower global prices.

Asked about Mr Hands’ claim in February 2022 that more UK production would not reduce the price of gas, a No 10 spokesman said:

I’m not sure of that particular tweet but I think what has been clear and has been made clear by the independent North Sea Transition Authority is that the two policy positions are totally compatible.

They admit themselves that beyond hitting net zero oil and gas will remain a part of the mix of energy that provides for the UK.

Pressed on whether that meant prices would fall, the official said:

Importing oil and gas from other countries, not only would that, necessarily, because you are reducing domestic supply, you are also increasing costs by importing and potentially also increasing carbon emissions because of the importation of the oil and gas.

I don’t see why and the Prime Minister doesn’t believe that if we have the resources here at home we shouldn’t use them.

Abu Dhabi National Oil Company has brought forward its net zero carbon emissions target by five years to 2045 as Opec member the United Arab Emirates prepares to host a major UN climate conference in December.

The UAE state oil giant, known as Adnoc, also disclosed for the first time the emissions from its operations, which reached about 24m metric tons of carbon dioxide equivalent in 2022.

The disclosure comes months before Dubai hosts the United Nations Cop28 climate summit, whose incoming president is Adnoc chief executive Sultan Ahmed Al-Jaber, a choice which has drawn criticism from climate activists.

The United Arab Emirates supplies nearly 3pc of global oil, which is a major source of greenhouse gases.

Adnoc, which aims to expand its oil and gas output in the coming years, said its upstream carbon intensity was around 7kg of carbon dioxide equivalent per barrel of oil equivalent, which is among the lowest in the world.

Banks have passed on less than 30pc of interest rate rises to savers, the City watchdog has found as it threatened a crackdown on lenders.

Our banking & financial services correspondent Simon Foy has the details:

The Financial Conduct Authority (FCA) said nine of Britain’s biggest saving providers only passed through 28pc of interest rate rises to their easy access deposits between January 2022 to May 2023, despite boosting rates on mortgage products.

The regulator added that the banks offering the lowest savings rates will be required to justify their positions by the end of August and if they are unable to do so, the FCA will take action.

The FCA’s review came amid concerns that banks are profiteering from rising interest rates.

Read why banks have faced heavy criticism.

US stock markets are expected to move little at the opening bell as investors await earnings from more megacap companies and a key employment report later this week.

All three main Wal Street indexes ended last week higher and appear set to gain this month as signs of cooling inflation and a resilient economy have cemented investor bets on a soft landing for the country.

Investor sentiment was also boosted by upbeat quarterly earnings from megacap growth companies including Alphabet, Meta Platforms and chipmakers Intel and Lam Research.

Blue-chip index the Dow Jones Industrial Average logged its longest winning streak in nearly four-decades earlier this month, underpinned by gains in sectors including healthcare, financials and energy that had underperformed during the first half of the year.

Investors are now awaiting quarterly reports from Apple, Amazon and AMD later this week, as well as July ISM Manufacturing reading and three sets of employment data, including July’s non-farm payrolls.

The Dow Jones Industrial Average and S&P 500 are on course to open 0.1pc higher, while Nasdaq 100 futures are flat.

It has been a relatively subdued day on the currency markets, even after data showing core inflation remained stubborn in the eurozone despite its economy growing 0.3pc in the second quarter.

The pound has lost 0.1pc against the euro, which is worth just under 86p.

However, sterling has gained 0.1pc versus the dollar to $1.28.

The pound is heading for a second straight monthly gain and fourth positive month in five in July.

Stubborn inflation readings and robust growth data have reinforced expectations that the Bank of England has more to do to bring inflation lower.

The boss of British American Tobacco (BAT) has rejected calls from a major shareholder to move its primary listing from London to New York in a boost for the City.

Tadeu Marroco, who because chief executive in May after being promoted from group finance director, said the move was “not a top priority” and a “very simplistic view”.

Companies have faced pressure to list in New York, where stocks have been able to attract higher valuations than in London.

Rajiv Jain, founder of GQG Partners, a major shareholder in BAT, said the FTSE 100 owner of Lucky Strike and Dunhill cigarettes should shift its main listing from London, where it has been since 1912.

However, Mr Marroco told said it is “very simplistic to attribute the valuation gap to the place where we are listed”.

He told the Times: “I note that there is an overall difference in terms of valuation between S&P 500, for example, and the FTSE 100, but it’s much more related to the sectors that are present in those indices and the weight of those sectors in the first place.”

He added: “There is no certainty that you can get into the index in the US, so you would be running the risk of being in limbo. So I would doubt very much that 75pc of shareholders would approve that [the move]. I have so many other things to do that wouldn’t be top of my priorities.”

Rishi Sunak’s announcement of hundreds of new North Sea oil and gas contracts - and the rethink on windfall taxes long term - has got Telegraph readers talking below.

Here are some of the best comments at the bottom of today’s live blog:

M Jefferson: “Thank goodness for a turn-around on windfall taxes. Companies continuing to invest on a significant scale in UK oil and gas should be relieved of this burden, as some of us have been arguing since the issue first came up.”

Jane Wyatt: “The Government has to convince the establishment to rethink the net zero policy otherwise they won’t win the debate. The general public have been convinced for ages.”

Robin Davies: “This government has the mental analysis of a dinosaur. It has been obvious for years that it is cheaper and more environmentally sensible to use the gas supplies we have in the UK, providing vital employment and helping the balance of payments rather than imports from halfway round the world.

“Furthermore if we had progressed with fracking we could also be exporting to Europe as well as providing self sufficiency for the UK at stable prices.

“At least this Government is finally beginning to act to ensure the UK will limit imports of oil, gas and coal in the next few years albeit as always far too late in the day.”

What are your thoughts on the Government’s net zero policies? Join the conversation in the comments section below

Italy’s economy unexpectedly contracted in a setback for Prime Minister Giorgia Meloni’s government as it tries to sustain prosperity and cut debt.

Gross domestic product shrank by 0.3pc in the second quarter from the previous three months — much worse than the zero growth estimated by analysts.

Statistics officials attributed the slump to a drop in domestic demand, while net exports failed to contribute to growth.

Industry and agriculture were particularly hit. The data illustrate how activity in the eurozone’s third-largest economy is starting to suffer from rising interest rates, weakening global export demand and the rollback of fiscal support.

The eurozone economy grew by 0.3pc over the same period. Italian GDP had risen by 0.6pc in the first quarter.

🏭 Domestic material consumption differed significantly among the EU members in 2022.Highest:🇫🇮 Finland (43.7 tonnes per person)🇷🇴 Romania (28.8)🇪🇪 Estonia (27.7)Lowest:🇪🇸 Spain (8.8 tonnes per person)🇮🇹 Italy (9.1)🇳🇱 The Netherlands (10.0)👉 https://t.co/HzTi2BUDQz pic.twitter.com/gOYTwF8uEX

The Government, together with the North Sea Transition Authority (NSTA) stressed future licensing would continue to be subject to a climate compatibility test.

But environmental protesters, including Greta Thunberg, are already insisting that permission should not be given to develop the Rosebank oil and gas field to the west of Shetland.

Philip Evans, an oil and gas transition campaigner at Greenpeace, said:

This new announcement is nothing but a cynical political ploy to sow division, and the climate is collateral damage.

Just as wildfires and floods wreck homes and lives around the world, Rishi Sunak’s government has decided to row back on key climate policies, attempted to toxify net zero, and recycled old myths about North Sea drilling.

Relying on fossil fuels is terrible for our energy security, the cost of living, and the climate.

Our sky-high bills and recent extreme weather have demonstrated that. Rishi Sunak knows that any oil and gas from the North Sea will just be sold on the international market, making oil companies even richer at the expense of the rest of us. How will this help our bills exactly?

If Sunak were serious about boosting our energy security while keeping energy bills down, he’d remove the absurd barriers holding back cheap, homegrown renewables and launch a nationwide insulation programme to tackle energy waste in our homes.

The go-ahead for the Acorn and Viking carbon capture plans makes them the third and fourth such projects to be backed by the Government, with the announcement coming as Mr Sunak committed to future oil and gas licensing rounds for the North Sea.

Shadow Scottish secretary Ian Murray MP said:

Labour has long since pledged to invest in carbon capture and storage in the North East of Scotland.

Support for the Acorn project is important albeit several years after it was expected to receive funding in the first track of government support, and long after Labour had committed to support the project.Unlike the Tories and the SNP, Labour is serious about a jobs first transition for North Sea with our plan to create 50,000 jobs in clean energy across Scotland.The next Labour government will turn Britain into a clean energy superpower, with publicly owned GB Energy headquartered in Scotland.

The Government has now committed to providing up to £20bn of funding for early deployment of carbon capture, utilisation and storage (CCUS), with the so-called Acorn project in Scotland’s north east now receiving support, along with the Viking project in the Humber.

Scottish Conservative leader Douglas Ross said:

The Prime Minister’s announcement of financial backing for the Acorn cluster is great news for the country and fantastic news for communities across North East Scotland.

Investing in carbon capture and storage, along with granting new oil and gas licences, is the very definition of a just transition by the UK Government – because it boosts the drive to net zero while recognising the continuing need for a variety of sources to meet our energy demands and protect jobs.

While Labour and the SNP have inexplicably turned their back on the North Sea, Rishi Sunak has recognised that to turn off the taps immediately would be unthinkable, as it would leave us more reliant on costly foreign imports of oil and gas with a far higher carbon footprint.

The Prime Minister’s announcement is a huge shot in the arm to the North East economy and the UK’s energy security.

The eurozone inflation data “will have been a disappointment for policymakers” at the European Central Bank, according to economists.

Although headline inflation fell in line with expectations to 5.3pc, core inflation was unchanged at 5.5pc in July as big falls in core goods inflation (from 5.5pc to 5pc) were offset by an increase in services inflation (from 5.4pc to 5.6pc).

Andrew Kenningham, chief Europe economist at Capital Economics, said: “Although core inflation should decline steadily as global supply problems ease and pull down core goods inflation quite rapidly, we suspect that services inflation will come down only slowly and will keep the ECB from pivoting to rate cuts until well into next year.”

He added that the 0.3pc increase in eurozone GDP were thanks to big increases in France and Ireland, “both of which were distorted by one-off factors and give a misleading impression of the underlying strength of the economy”.

He added:

Excluding these two countries, GDP growth would have been only 0.04pc quarter on quarter, or zero to one decimal place!

As these factors are unlikely to be repeated in the coming quarters and the impact of monetary policy tightening is still intensifying, we think euro-zone GDP will contract in the second half of the year.

Underlying inflation in the eurozone held above estimates last month, overshadowing a return to economic growth.

The single currency area’s economy expanded by 0.3pc in the three months to June, compared to the previous quarter, according to Eurostat.

However, separate data showed that the closely-watched core consumer prices inflation, which strips out volatile elements like food and energy costs, held at 5.5pc, above estimates of a fall to 5.4pc.

Headline inflation fell back to 5.3pc in July, down from 5.5pc.

Euro area #inflation at 5.3% in July 2023, down from 5.5% in June. Components: food, alcohol & tobacco +10.8%, services +5.6%, other goods +5.0%, energy -6.1% - flash estimate https://t.co/ZRulqYvik4 pic.twitter.com/sUJi2lTwUX

Consumers took on unsecured credit at the strongest pace in more than five years indicating strength in the economy despite a jump in interest rates.

The Bank of England said net consumer credit - spending on credit cards and loans - rose £1.67bn in June, the biggest increase since April 2018.

Lenders authorised 54,662 mortgages, the most since October. Both figures were stronger than economists had expected.

The figures suggest consumers are coping with the fastest cycle of increases in borrowing costs since the 1980s as the Bank of England attempts to tame inflation.

Credit card lending rose £614m in June while other unsecured credit including personal loans and car finance jumped by £1.05bn, the Bank said.

Oil is heading for its biggest monthly gain of the year amid signs the market is tightening, with estimates that crude demand is running at a record pace just as the Opec+ cartel cuts back production.

Brent crude, the international benchmark, has edged downward today to below $85 a barrel but has rallied nearly 14pc this month, putting it on course for the biggest advance since January 2022.

West Texas Intermediate has held above $80 after a run of five weekly gains that has lifted prices to the highest since April.

Goldman Sachs has forecast Brent to reach $86 by December, with analysts Daan Struyven and Yulia Zhestkova Grigsby saying that the market “has abandoned its growth pessimism”.

It comes as Rishi Sunak has announced hundreds of North Sea oil contracts and new carbon capture projects, which he said will support 50,000 jobs.

Government borrowing costs have picked up as traders wait for the latest inflation data from the eurozone, after European Central Bank president Christine Lagarde raised the prospect of an interest rate rise later in the year.

UK 10-year gilt yields have risen three basis points to 4.35pc while Germany’s 10-year government bund coupon, the bloc’s benchmark, was up two basis points at 2.5pc.

Ms Lagarde told France’s Le Figaro newspaper that there “could be a further hike of the policy rate or perhaps a pause,” adding that a pause “whenever it occurs, in September or later, would not necessarily be definitive”.

Economists expect eurozone inflation to have cooled to 5.3pc year-on-year in July from 5.5pc in June. They see core inflation, which strips out energy and food prices, slowing to 5.4pc, also from 5.5pc.

European natural gas prices are poised for one of their biggest monthly drops this year as the Prime Minister announces hundreds of new North Sea oil contracts.

Strong storage levels have offset concerns that the heatwave across Europe would send demand surging for air conditioning.

Dutch front-month futures, the European benchmark, have risen 7.6pc today but contracts are still on track for a drop of about 25pc in July.

Prices have slumped over 60pc this year, although they had surged in June as heat began to blanket parts of Europe.

The sustained demand shortfall has allowed the continent to bolster storage levels, that are now well above the seasonal average at 85pc.

The FTSE 100 has fallen 0.3pc although the market is poised to end the month higher amid cooling inflation.

The more domestically-focused FTSE 250 midcap index has also fallen 0.3pc ahead of the Bank of England’s next interest rate decision, due on Thursday.

Pearson shares had added 3.6pc after the global education group reiterated its outlook.

However, its price has gone into reverse despite beating market expectations with 44pc growth in profit in its first half.

The exporter-heavy FTSE 100 is set to post a monthly gain of over 2pc in July as risk sentiment flourished after data earlier this month showed domestic inflation eased more than expected.

Industrial metal miners added 0.3pc as prices of most base metals advanced, while heavyweight energy stocks rose 0.1pc.

Marshalls slumped as much as 9.4pc after the company posted its half-year outlook.

Fossil fuels will continue to play a “major role” in Britain’s energy base for years to come, a Conservative MP has said.

Andrew Bowie, minister for nuclear and networks, told BBC Radio 4’s Today programme:

This is about maxing out our oil and gas reserves and that means that we will be much more energy secure and less dependent on hostile actors like Vladimir Putin.

The independent climate change committee understands that fossil fuels will play a major role in our energy base for years to come so we think it’s essential that that fossil fuel comes from British water, ensuring the revenue comes to the British exchequer rather than paying to import, which would have a higher CO2 emission and rely on sometimes hostile foreign powers.

Responding to accusations by campaign group Greenpeace that the Government’s funding for a carbon capture project in Aberdeenshire, Scotland, is “greenwashing”, Mr Bowie said:

I don’t recognise that. We are committed to reaching net zero by 2050.

We were the first parliament in the world to legislate for that. Carbon capturing plays a major role in delivering that.

SNP Westminster leader Stephen Flynn welcomed the UK Government’s announcement on funding for the the Acorn carbon capture project in Aberdeenshire.

He told BBC Radio Scotland’s Good Morning Scotland programme:

Whilst I do welcome the fact that we are now in this position and it is of course excellent news for the north-east of Scotland, I’m very frustrated that it’s taken 18 years to get to this point.

I think in anything that comes from the UK Government the devil will very much be in the detail but I don’t think anyone can step away from the fact that this is a positive step in the right direction after 18 years of dither and delay.

I guess the key thing now is making sure... that the UK Government back up this announcement today with real progress in terms of timing and the evaluation process.

Markets in London were little changed after the open as investors wait to see what the latest inflation figures for the eurozone will show.

The FTSE 100 was flat at 7,694.55 while the midcap FTSE 250 was subdued at 19,117.56.

Asked if he had travelled to Scotland today by private jet, the Prime Minister said:

I’ll by flying as I normally would and that’s the most efficient use of my time.

But actually that question brings to light a great debate here, if you or others think that the answer to climate change is getting people to ban everything that they are doing, to stop people going on holiday, I mean, I think that’s the absolutely the wrong approach.

Mr Sunak told BBC Radio Scotland’s Good Morning Scotland programme: “Every prime minister before me has also used planes to travel around the United Kingdom because it’s an efficient use of time for the person running the country so we can keep focusing on delivery for people.”

The 2030 ban on the sale of new diesel and petrol vehicles remains Government policy, the Prime Minister has said.

Asked on BBC Radio Scotland’s Good Morning Scotland programme if the policy still stands, Rishi Sunak said:

Yeah, that’s about new cars. Not all existing cars. So it’s the sale of new cars. Yeah, that’s been the Government’s policy for a long time. It remains the Government’s policy.

But what I have said more generally on my approach, is that we will transition to net zero, I’m committed to it, but we will do it in a proportionate and pragmatic way that doesn’t necessarily add burden or cost to families’ bills, particularly at a time when inflation is higher than any of us would have liked.

And more generally, on motorists, I think actually, this was down recently the Ulez expansion that your listeners may or may not be familiar about which, which I don’t think it’s the right thing.

I think at a time when, as I said, families are looking at bills and worried about inflation, adding £12.50 on to their life every time they visit the supermarket or a GP or drop their kids off at football practice does not seem to me to be the right thing to do.

BBC licence fee collector Capita has announced boss Jon Lewis will retire from the outsourcing giant next year.

The London-listed company said Mr Lewis, who has led the business since 2017, will step down as chief executive towards the end of this year, and will remain involved until next July to help with its transition.

Adolfo Hernandez, current vice president of global telecommunications at Amazon Web Services will take over as chief executive.

The firm said Mr Lewis’s departure comes after he told the board last year he was considering his future options, including his eventual retirement.

The move comes two months after Capita revealed it would take a hit of up to £20m from a recent cyber attack that saw some customer, supplier and staff data accessed by hackers.

BT has named board director Allison Kirkby as its new chief executive to take over from outgoing boss Philip Jansen by the end of January next year.

Ms Kirkby, who is a non-executive director of BT, will be tasked with handling the commitment of her predecessor to cut up to 55,000 jobs by the end of the decade.

She is currently president and chief executive of Swedish telecoms firm Telia Company.

The telecoms giant said Mr Jansen will remain chief executive until the end of January “at the latest” but will remain available to support the handover until the end of next March, when he will retire.

The group will make a further announcement to confirm Ms Kirkby’s exact start date.

The Government has signalled that it will rethink its windfall taxes on oil and gas profits after the Prime Minister announced hundreds of North Sea oil contracts.

The Treasury has already committed to keeping the so-called Energy Profits Levy in place until March 2028 as companies saw their earnings surge after Putin’s invasion of Ukraine.

However, today ministers launched a call for evidence seeking views on the “evolving context for taxes” on the sector over the long term.

Rishi Sunak said the projects were vital for Britain’s energy security amid the war in Ukraine and pointed to new analysis showing domestic gas production has around one-quarter the carbon footprint of imported liquified natural gas.

The Prime Minister will travel to Aberdeenshire to reveal that the so-called Acron project in North East Scotland and the Viking project in the Humber have been chosen as the locations for two new carbon capture usage and storage clusters, which could support up to 50,000 jobs.

Speaking on BBC Radio Scotland’s Good Morning Scotland programme, Rishi Sunak said: “Even when we reach net zero in 2050 a quarter of our energy needs will still come from oil and gas.”

Mr Sunak said: “We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world.

“Now more than ever, it’s vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.

“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas. But there are those who would rather that it come from hostile states than from the supplies we have here at home.

“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy.”

Hundreds of new North Sea oil and gas licences have been approved as Rishi Sunak makes fossil fuels a firm part of Britain’s “transition to net zero”.

The Prime Minister will travel to Aberdeenshire today to unveil the contracts and new carbon capture projects, as he said a quarter of Britain’s energy needs will be met by oil and gas even if Britain meets its net zero targets by 2050.

Mr Sunak said the projects were vital for Britain’s energy security amid the war in Ukraine and pointed to new analysis showing domestic gas production has around one-quarter the carbon footprint of imported liquified natural gas.

North East Scotland and the Humber have been chosen as the locations for two new carbon capture usage and storage clusters, which could support up to 50,000 jobs.

Mr Sunak said: “We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world.

“Now more than ever, it’s vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.

“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas. But there are those who would rather that it come from hostile states than from the supplies we have here at home.

“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy.”

The commitment for hundreds of new oil and gas licences in the North Sea will “drive forward our energy independence and our economy for generations”, Energy Security Secretary Grant Shapps has said.

Mr Shapps said in a statement:

In the wake of Putin’s barbaric invasion of Ukraine, our energy security is more important than ever. The North Sea is at the heart of our plan to power up Britain from Britain so that tyrants like Putin can never again use energy as a weapon to blackmail us.

Today’s commitment to power ahead with new oil and gas licences will drive forward our energy independence and our economy for generations.

Protecting critical jobs in every region of the UK, safeguarding energy bills for British families and providing a homegrown fuel for our economy that, for domestic gas production, has around one-quarter the carbon footprint of imported liquified natural gas.

Our next steps to develop carbon capture and storage, in Scotland and the Humber, will also help to build a thriving new industry for our North Sea that could support as many as 50,000 jobs, as we deliver on our priority of growing the economy.

Rishi Sunak has confirmed Government backing for new oil and gas licences in the North Sea that will support 50,000 jobs.

The Prime Minister is expected in Aberdeenshire today, where he will announce millions of pounds in funding for the Acorn carbon capture project, a joint venture between Shell UK and other companies.

He has announced the oil and gas licensing rounds as new analysis shows domestic gas production has around one-quarter the carbon footprint of imported liquified natural gas.

1) Mortgages rates tipped to fall this week | Better than expected inflation data fuels hope of reprieve for borrowers at next Bank of England meeting

2) Food prices rising faster in restaurants than in supermarkets | Suppliers slow to pass on falling prices after absorbing months of cost increases

3) Britain’s security at risk from virtue-signalling banks, ministers warn | Rebuke comes as ethically driven investing practices fuel defence industry divestment

4) Demand for London office space slumps as work from home takes root | Changes in workers’ behaviour and the cost of eco-upgrades challenge the sector

5) Mongolia willing to help Putin ship gas to the East | Landlocked democracy is sandwiched between two autocratic neighbours

Shares were mostly higher in Asia after Wall Street got back to climbing following more encouraging profit reports and the latest signal that inflation is loosening its chokehold on the economy.

Sentiment also has been boosted by revived hopes for more stimulus from Beijing for the sluggish Chinese economy.

Chinese factory activity contracted in July as export orders shrank, a survey showed, adding to pressure on the ruling Communist Party to reverse an economic slowdown.

Tokyo shares rose as investors cheered the dollar’s strength against the yen and gains on Wall Street.

The benchmark Nikkei 225 index rose 1.3pc to 33,172.22, while the broader Topix index added 1.4pc to 2,322.56.

The Hang Seng in Hong Kong rose 1.5pc to 20,208.78 while the Shanghai Composite index advanced 0.6pc to 3,296.58.

In Seoul, the Kospi climbed 0.7pc to 2,626.86. Australia’s S&P/ASX 200 edged 0.1pc lower, to 7,399.00 and the SET in Bangkok was up 0.6pc. The Sensex in India was little changed.