Interest rates – live: Bank to make decision after high inflation figures

Amazon bosses have told staff that some employees will lose their jobs over the coming years as they step up the use of Artificial Intelligence.

The company employs around 1.5m people around the world, with more than 60,000 estimated to be working in the UK.

A memo from chief executive Andy Jassy to staff did not clarify the number of roles which would be handed over to AI control, but said there would be an inevitable change over what work would be carried out by people and what could be left to agentic AI.

Ivo Mertens, Chief Economist at iBanFirst, has detailed currency movements ahead of the Bank of England’s interest rate decision.

The US dollar continues to weaken and wider geopolitical influences could impact going forward.

“As the Bank of England meet once again to make a rates decision, the euro continues its rise against a dollar weakened by trade and geopolitical uncertainties, and general investor anxiety as Trump’s 90-day truce draws closer,” he said.

“EUR/USD has extended its rally, recently hitting a new high at 1.1632, while GBP/USD climbed to 1.3634.

“While markets expect a status quo from the Bank of England, the hawkish stance taken by the ECB could continue to support the single currency. Although rising energy prices linked to the Israel-Iran conflict and U.S. immigration policy could influence inflation and rate expectations.

“If markets start to factor in these dynamics, it could lead to a rebound in U.S. interest rates. In that context, only a spike in inflation or a flare-up in geopolitical tensions that triggers safe-haven flows may support the dollar in the medium term. For now, however, the downward trend for the greenback appears firmly in place.”

As AIM turns 30, Nicholas Hyett, investment manager at Wealth Club, has some thoughts over reasons to be positive about its future:

• Increasing listed companies in the coming years
• Inheritance tax benefits (for now)
• The end of US exceptionalism
• Valuations suggestion potential 40% gains over the next few years
• The fact departures should broadly be welcomed

While AIM has its detractors and certainly has seen many businesses leave and not be replaced, Mr Hyett points to the positives.

“One of the reasons AIM, and the UK more generally, has struggled is that valuations for UK listed companies are so much lower than in the US,” he said.

“That could be changing, recent months have seen the value of US companies fall slightly versus the rest of the world – suddenly the UK isn’t a bargain basement anymore. Companies staying around longer means more opportunity for UK investors to benefit from their growth.

“AIM’s IHT benefits have been a major source of discussion, and yes they’ve been halved in the last 12 months. Nonetheless, as things stand, AIM shares remain the only way to reduce the inheritance tax due on your ISA – often someone’s largest asset outside their home and pensions and potentially a source of a lot of death duties.”

A key consideration for the Bank of England ahead of today’s interest rates announcement will be oil prices.

Figures yesterday showed lower fuel and air fares were among the factors leading to very marginal lower overall inflation, but since May the price of oil has risen significantly.

Israel-Iran tensions and the prospect of the possible closure of a key shipping route has seen Brent Crude rise to almost $77 – it’s up 0.23 per cent today, with Crude Oil also up 0.59 per cent to $75.58.

Over the last two months those prices have been around the low-to-mid 60s.

Higher oil prices tend to lead to higher inflation down the line.

• Mike Ashley has pulled out of an approach to buy Revolution Beauty, a week after announcing the consideration of an all-cash bid. Ashley’s company Frasers are the biggest shareholder in Boohoo (now Debenhams), which in turn is the biggest shareholder in Revolution.
• The Telegraph are reporting Shein facing an investigation over dodged taxes in the UK.
• And the boss of OpenAI has accused Meta of trying to buy top staff with $100m signing on bonuses.

Waitrose is set to open its first full-size supermarket in seven years as part of a multi-million-pound expansion plan.

The new 30,000 square foot store, located in Brabazon, a new town in North Bristol, is anticipated to open its doors in 2027.

The move follows a multi-million-pound agreement by parent company the John Lewis Partnership, signalling a renewed focus on larger retail formats.

Developed in partnership with YTL Developments, the new supermarket is expected to create approximately 150 jobs in the area.

Time for a quick look ahead – the Bank of England will be announcing in about three hours their latest interest rates plan, so here’s how factors come together to make that call.

Inflation remained higher than expected for May when data came out yesterday.

The aim is for a 2 per cent inflation rate, and we’re way above that for now, which is a push for the BoE to keep interest rates higher.

Higher interest rates are an incentive for businesses to make fewer investments in projects or hiring, which in turn lowers wage growth or jobs, which means less spending power for people, lower demand and thus helps to stem price rises…which is, basically, inflation.

However – the government really want a growing economy, and for that businesses need lower interest rates to encourage them to produce, spend and hire more.

That’s a big ongoing battle right now.

But slowing wage growth, rising unemployment rate, the potential for the price of oil to surge due to the situation in Iran right now and other geopolitical forces are all also pulling and pushing inflationary or deflationary forces all the time.

The BoE must balance all this, and decide the course of action to take every few weeks – including today.

The Swiss National Bank has highlighted major risks to the global economic outlook, including high public debt, geopolitical tensions and a stretched US stock market.

“Several risk factors could amplify the impact of potential negative shocks on global economic and financial conditions,” the SNB said in its 2025 Financial Stability Report.

The central bank has urged higher regulatory systems and backed proposals by the Swiss government to prevent future banking crises.

Considering domestic inflation data, overall investor caution and everything going on with Iran, the US and beyond, perhaps not surprising the FTSE is down this morning.

The 100 is down 0.4 per cent in early trading, with the 250 down 0.72 per cent.

In Europe it’s a similar story:

German DAX: -0.6 per cent

French CAC 40: -0.65 per cent

Euronext 100: -0.5 per cent.