Running Out Of Ideas!                                                    20 June 2025

A new report by Morgan’s International Realty indicates that only 61.6% of the expected 2025 residential supply will be delivered, giving a total of 22.9k units, falling well short of anticipated supply. Their figures for 2026 are even bleaker with only 53.0%, (equating to 57.6k), being delivered. This is in line with Fitch Ratings analysis that only 55.7%, (97k out of 174k units) were delivered between 2022-2024, attributing the shortfall to various factors, including difficulty in securing quality contractors, project sales timelines, funding delays from banks, and buyer payment issues.

Its Dubai Residential Supply and Delivery Outlook 2025–2027 report identifies the primary areas for residential handovers. In 2025, most new units will be delivered in Studio City, Sobha Hartland, Jumeirah Village Circle, Jumeirah Lake Towers and Al Furjan. For 2026, deliveries will be concentrated in JVC, Azizi Venice, Damac Lagoons, Business Bay and Arjan. In 2027, the supply chain grows to 70.5k units – almost double that of the emirate’s five year 35.5k average – located in JVC, Business Bay, Azizi Venice, Dubai Hills Estate and Creek Harbour. In the three years from 2025, the study shows that 151k units, (22.9k + 57.6k + 70.5k), will be handed over, with the three most active locations, accounting for 34.9k (23.1%)  of the total being JVC, Business Bay Azizi Venice – with 16.9k (11.2%), 10.1k (6.7%) and 7.9k (5.2%).

Shamal has unveiled a ninety-unit residential development at the historic Dubai Zoo site. Residents will have access to amenities centred around courtyards including a club house, wellness area, children’s play area, family pool, lounge and gym.  In 1967, the then Dubai Ruler, HH Sheikh Rashid, permitted Otto J Bulart to build a zoo on a two-hectare plot in Jumeirah. It was considered a Dubai landmark in the late 1960s as it indicated the “town’s end”. It finally closed down in 2017, with all the animals transferred to the new Dubai Safari Park.

According to Betterhomes, Jumeirah Bay Island is the best-performing waterfront property investment in Dubai, having gained 24% in value over the past twelve months, with the consultancy adding that it is ‘leading a wider trend across sought-after coastal communities like Palm Jumeirah, Bluewaters Island, and JBR’. It is estimated that the annual per sq ft price for a JBI residence has risen to US$ 1.123k – 24.4% on the year – compared to the 5.3% hike in Palm Jumeirah to US$ 1.000k. The report also added that “Dubai’s most sought-after waterfront neighbourhoods like Jumeirah Beach Residence, Jumeirah Bay Island, Palm Jumeirah, and Bluewaters Island are continuing to outperform, with average prices per sq ft rising between 8% and 10% year-on-year”.

Nakheel, part of Dubai Holding Real Estate, has awarded DBB Contracting three contracts, valued at over US$ 204 million for major infrastructure works on Palm Jebel Ali, including roads, utilities and support for future residential and commercial development; work is slated for completion by Q2 2026. The project is aligned with the Dubai Economic Agenda D33, and will comprise seven islands, encompassing 13.4 km, featuring sixteen fronds and over ninety km of beachfront – all part of Dubai’s 2040 Urban Master Plan.

A US$ 123 million construction contract has been awarded to Naresco Contracting for Central Park Plaza, by Meraas, part of Dubai Holding Real Estate. The twin tower building – one with twenty-three floors and the other with twenty – will house two hundred and twelve apartments, designed for modern urban living. The high-end residential development at City Walk is slated for completion by Q3 2027.

Omniyat has announced its latest project – “Gateway to Business Bay” – located on Sheikh Zayed Road, at the intersection of Business Bay and Downtown Dubai. The forty-eight-storey commercial tower, with a development value of almost US$ 1.0 billion, will feature an open-air Sky Theatre, a first-of-its-kind entertainment and event space located at the top of a commercial tower; it will add 650k sq ft of Grade A leasable office space, when it is completed in Q1 2029. All the ninety-one shell-and-core office units have been designed, with full fit-out flexibility.

Binghatti has announced that it is to set up an asset management company, with plans to manage about US$ 1.0 billion in private credit and real estate opportunities. The master developer’s Binghatti Capital Ltd, based in DIFC, will implement ‘separate mandates’ for the acquisition and sale of off plan residential properties. Its private credit solutions will focus on ‘supply chain financing’ in the real estate sector, by offering financing solutions to construction firms, property management entities and key suppliers.

This week saw Dubai Sotheby’s broker a US$ 100 million deal for a 90.0k sq ft freehold residential plot on Palm Jumeirah. Located on a frond tip position, with unobstructed views of Bluewaters Island, and the Dubai Marina skyline, this has become the island’s most expensive land transaction so far this year. The agency estimates that land prices on Palm Jumeirah have jumped 18.9% higher YTD, although transaction volumes have declined by 14.0%. With an influx of thousands of international buyers, seeking secure investments and waterfront living, it is no surprise to read that the Dubai Land Department has transacted over 7.7k plots in the first one hundred days of 2025. Last week, DLD registered 3.52k sales and US$ 4.2 billion in value.

Fully funded through a mix of equity and debt, Taaleem is buying a 95% stake in Kids First Group Ltd, which has thirty-four nurseries in Dubai, Abu Dhabi and Doha, offering four ‘distinct curricula through its prestigious brands’; they include Redwood Montessori Nursery, Odyssey Nursery, Willow Children’s Nursery, Ladybird Nursery and Children’s Oasis Nursery. The Dubai based school’s operator is one of the leading upscale early learning education providers in the Gulf, and Kids First Group Ltd, with 5k students, being one of the major players. Taaleem confirmed that “upon completion of the acquisition, KFG will operate as a standalone vertical within Taaleem’, with the founder and 5% shareholder of KFG ‘continuing to oversee the future growth, as the CEO’, and current staff operating under a new banner.

As part of the government’s strategy to make Dubai the best place in the world in which to live, work and invest, HH Sheikh Mohammed bin Rashid has launched phase 2 of his Zero Bureaucracy Programme. In November 2023, the ZGB programme was set up to overhaul the current government work structure and to enhance service efficiency and quality. The programme was to eliminate redundant government procedures and requirements, in order to simplify the administrative process. Ministries and government entities were tasked with the immediate implementation of the programme, with targets including cancelling a minimum of 2k government measures, halving the time required for procedures, and removing all unnecessary bureaucracy by end of 2024. For example, Dubai’s Roads and Transport Authority has reduced its total number of vehicle licensing services by 74.1%, from fifty-four to fourteen, in services as part of a major effort to enhance operational efficiency and deliver a seamless digital experience to customers.

HH Sheikh Mohammed bin Rashid, has expressed confidence that the country will achieve its non-oil foreign trade target to top AED 4.0 trillion, (US$ 1.09 trillion), four years ahead of its originally planned 2031 target. The Dubai Ruler also highlighted that the UAE’s non-oil foreign trade saw growth of 18.6%, on the year in Q1, to US$ 227.52 billon, adding that the “nation’s non-oil exports experienced exceptional growth, surging by 41% annually”. Non-oil exports account for over 21% of the UAE’s total non-oil foreign trade for the first time, whilst outpacing the growth of both reexports, (up 6.0% to US$ 51.5 billion) and imports – 17.2% higher at US$ 127.6 billion. He highlighted that “indicators of social, economic, and strategic stability and prosperity are at their highest historical levels. We are confident in an even brighter future, driven by the focused efforts of thousands of dedicated teams working to realise the UAE’s global ambitions”.

Q1 trade with its ten leading trading partners continued to move higher, at a rate of knots, growing by 20.2%, compared to 16.9% growth with the other remaining countries, with notable figures from Saudi Arabia, India, China and India of 127%, 31.0%, 9.6% and 8.3%. 2024 real GDP touched US$ 482 billion, 4.0% higher, with non-oil sectors accounting for 75.5% of the national economy, contributing US$ 365.7 billion to the economy – and oil-related activities US$ 118.3 billion. The five leading sectors driving the non-oil sector are transport/storage, building/construction, financial/insurance, hospitality and real estate growing by 9.6%, 8.4%, 7.0%, 5.7% and 4.8%. Activity-wise, trade, manufacturing, financial/insurance, construction/building and real estate contributed 16.8%, 13.5%, 13.2%, 11.7% and 7.8% of the non-oil GDP.

A UNCTAD report shows that the UAE accounted for 55.6% of total FDI inflows into the ME, totalling US$ 82.08 billion, a 4.7% increase on the year and ahead of Saudi Arabia (US$ 15.73 billion), Türkiye (US$ 10.59 billion), and Oman (US$ 8.68 billion), where returns declined on the year. The UAE’s outward FDI also saw moderate growth, rising by 4.8% to reach US$ 23.4 billion in 2024. The country was ranked tenth globally as a leading destination for inbound FDI, with an unprecedented US$ 45.6 billion in FDI inflows. It also ranked second globally, after the US, in attracting greenfield FDI projects, with 1.4k new projects announced last year. Sector-wise, software/IT services led announced FDI greenfield project values (11.5%), followed by business services (9.7%), renewable energy (9.3%), coal/oil/gas (9%), and real estate (7.8%). HH Sheikh Mohammed bin Rashid noted, “our foundation is strong, our future is promising, and our focus on our goals is crystal clear. Our message is simple: development is the key to stability, and the economy is the most important policy.”

The latest UBS ‘Global Wealth Report 2025’ indicates that a further 13k were added to the ranks of UAE’s dollar millionaire resident base in 2024 – at an annual 5.8% increase to 240.3k; much of this increase is due to re-locations from overseas, as has been the case for the past four years now. (Last year, Turkiye posted an 8.4% increase, (equating to 7k in its number of dollar millionaires). Henley & Partners estimated that when it comes to HNWIs, there are 130.5k millionaires, including the 7.3k who arrived in the year – 53% higher on the year. Knight Frank has pointed to the influx of Saudi, Indian, Chinese and UK HNWIs committing sizable investments in the UAE. The 240.3k dollar-millionaires in the UAE have a combined wealth of US$ 785 million, slightly less than the 339.0 dollar-millionaires, with a combined wealth holdings of US$ 958.3 million in Saudi Arabia. When it comes to wealth distribution, around 62% of gross wealth is allocated to financial assets, such as real estate.  It is estimated that the average wealth per adult in the UAE is US$ 147.7k – compared to the likes of Switzerland, Hong Kong, Luxembourg and Australia, with average wealths of US$ 620.7k, US$ 601.2k, US$ 566.7k and US$ 516.6k

According to Emirates NBD Research, Dubai’s May headline CPI inflation nudged 0.1% higher to 2.4%; on the monthly measure, prices were 0.2% lower, following a 0.3% rise in April. Over the first five months of 2025, annual inflation has averaged 2.8%. However, most components of the basket continue to show only moderate price growth. 40% of the ‘CPI basket’ comprises housing and utilities prices and the ongoing high rentals in the emirate has maintained flat at 6.9% – and if this were taken out of the equation, then inflation would be at a much lower level. Fortunately, rentals have started slowing down and this in turn should impact the headline inflation rate by pushing it lower.  The two other main contributors in ‘the basket’ are food/beverage, (11.6%) and transport, (9.3%). The former rose 0.3% in the month, compared to a 0.2% dip in April, and the latter fell by 8.8% on the year, 1.1% higher than April’s return of 7.7%. It seems likely that the rate will continue to hover around its current level for the remainder of the year.

The regulator of the Dubai International Financial Centre has begun engagement with firms selected for its Tokenisation Regulatory Sandbox to co-develop bespoke testing plans, with trials within a controlled environment commencing in the coming weeks. It had received ninety-six expressions of interest, both locally and globally. The trial results will dictate future regulatory policy and potential refinements to the DFSA’s evolving digital assets and broader innovation frameworks. In 2021, the Dubai regulator introduced an Investment Token regime to regulate tokens, used as investment instruments, and implemented an enhanced Crypto Token regime in 2022 as a second-phase framework for classifying, recognising, and governing crypto tokens. This was followed in June 2024, when the DFSA further refined its approach with amendments – including streamlined token-recognition criteria and the first approvals of stablecoins – underscoring its commitment to adaptive, responsible innovation.

Bitcoin.com has joined the DMCC Crypto Centre – its first office in the MENA region.  This is another indicator that the DMCC has fast become a major hub for Web3 and blockchain innovation. The DMCC Crypto Centre, located in Uptown Tower, is now home to over six hundred and fifty companies, involved in various aspects of the blockchain and digital asset industry. Belal Jassoma, Director of Ecosystems, noted that “Bitcoin.com’s decision to establish its regional headquarters within our community highlights the global pull of the Crypto Centre and the scale of opportunity that Dubai represents today.” The centre offers comprehensive business services, mentorship, access to capital, and partnerships with global Web3 leaders. Bitcoin.com plans to leverage Dubai’s thriving digital economy, as well as contributing its global expertise to accelerate the growth of the regional crypto ecosystem. DMCC currently hosts over three thousand, two hundred tech companies, with over eight hundred within its integrated technology and innovation ecosystem, including the DMCC Gaming Centre and DMCC AI Centre.

After a decade of service in Pakistan, Dubai-based Careem is to suspend all its operations there as from 18 July 2025, driven by economic challenges, rising competition, and capital constraints. Launched in 2015, it soon became a dominant player in app-based mobility, but Careem’s exit reflects the strain on the country’s digital economy, as tech firms scale back amid high inflation, weak consumer demand, and tighter global capital flows. Uber left Pakistan in 2022 for the same reasons listed above, whilst newer entrants such as Russia-backed Yango and Latin America’s inDrive have expanded in major cities, offering low-cost models.

Sundus Exchange has had its licence revoked, and has been removed from the official register, by the Central Bank of the UAE, following regulatory examinations which uncovered serious violations of anti-money laundering and counter-terrorism financing laws. Furthermore, it has been hit by a US$ 2.72 million penalty under Article 14 of the Federal Decree Law No. 20 of 2018. The central bank also reminded all stakeholders in exchange houses to comply strictly with national regulations to prevent financial crimes.

With its Vodafone’s latest share buyback programme, e& will still retain its 3,944.7 million shares in the UK company but will see its stake rise from 15.01% to 16.0%. In May 2022, the UAE telecom made its original investment in Vodafone Group Plc, and a year later entered into a strategic relationship, that established e& as a cornerstone shareholder of Vodafone. This agreement formalises collaboration, across a broad range of growth areas, as e& and Vodafone may be able to benefit from each other’s respective operational scale and complementary geographic footprint.

The DFM opened the week, on Monday 16 June, one hundred and seventy-one points lower, (3.1%), on the previous week, shed thirteen points (0.2%), to close the trading week on 5,352 points, by Friday 20 June 2025. Emaar Properties, US$ 0.22 lower the previous week, shed US$ 0.04, closing on US$ 3.38 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.74 US$ 5.78 US$ 2.29 and US$ 0.41 and closed on US$ 0.74, US$ 5.76, US$ 2.28 and US$ 0.41. On 20 June, trading was at two hundred and eighty-two million shares, with a value of US$ two hundred and forty-six million dollars, compared to four hundred and sixty-two million shares, with a value of US$ three hundred and ten million dollars on 13 June 2025.

By Friday, 20 June 2025, Brent, US$ 9.94 higher (15.6%) the previous fortnight, gained US$ 2.84 (3.8%) to close on US$ 76.68. Gold, US$ 465 (15.6%) higher the previous three weeks, shed US$ 68 (2.0%) to end the week’s trading at US$ 3,385 on 20 June. The US Federal Reserve calculates that a US$ 10-per-barrel increase in the price of crude oil raises inflation by 0.2% and sets back economic growth by 0.1%.

It has been reported that Palliser Capital has now bought up to 5% of the London-listed travel retailer, WH Smith – valued at around US$ 88 million – just weeks after it had divested itself of its iconic high street arm. (The prominent activist investment firm recently led an effort to force Rio Tinto, the global mining group, to abandon its London listing in favour of Australia). It considers that returns to WH Smith shareholders may be enhanced by measures to ensure better use of its balance sheet, such as reviewing the travel retailer’s leverage targets and capital allocation policy, as well as improving investor communication and disclosure, and overhauling its executive incentive structure to align it more closely with the interests of shareholders. Its shares are still trading at levels seen during the pandemic, at a time when travel went to almost zero levels. Currently, it has a market cap of US$ 1.85 billion (10% lower on the year). It has more than 1.2k travel stores in over thirty countries. Palliser also looks upon the US as a growth market, and along with increasing investment in global airport infrastructure creating more opportunities for airport retailing, estimates that its share value could double over the next three years.

Hundreds more high street jobs are being put at risk as part of a sweeping overhaul of the embattled family-owned fashion retailer River Island which is looking at cutting its number of stores by 14.4% to one hundred and ninety-seven. Another seventy outlets could go if no suitable agreements are made with landlords. Ben Lewis, its chief executive, noted that “the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers’ needs. The sharp rise in the cost of doing business over the last few years has only added to the financial burden”. Latest figures indicate that the 2023-year revenue fell 19.0% to US$ 780 million, with a pre-tax loss of US$ 45 million. New funding will be injected into the retailer if the restructuring plan is approved in August.

Over recent months, this blog has often mentioned how the London Stock Exchange has been struggling to keep listed companies. Investment bank, Peel Hunt, has indicated that it knows of thirty companies, with market values of over US$ 134 million, (GBP 100 million), that have left the bourse YTD, including twelve large enough for the FTSE 250. The latest ‘casualty’ is Assura, the US$ 2.5 billion-owner of GP surgeries, preferring a US private equity takeover over a domestic merger. Another is the FTSE 100 listed industrial hire group, Ashtead, (with profits dipping to US$ 2.85 billion), announcing it will be moving away to a US bourse early in 2026 citing that it was the “natural long-term listing venue” for the group and a shift would improve both its liquidity and profile in its biggest market. To make matters even worse for the LSE, there are active takeover bids this week for tech companies Spectris and Alphawave, which will see them delisting and moving ‘across The Pond’.

There are reports that Spanish bank Santander is one of several parties expressing interest in a takeover of UK high street bank, TSB. Reports indicate that it has approached its fellow Spanish banking group Sabadell, which had acquired TSB, from Lloyds Banking Group, in 2015, about a possible transaction involving TSB but as of last Wednesday, no formal offer was on the table. However, since it has been in contact with its Spanish peer, it shows that there is some interest in TSB. In line with other UK banks, Santander has been closing many branches, so that now it has three hundred and fifty operating in the UK; TSB have about 50% of that number. NatWest has already submitted a US$ 14.79 billion for Santander UK. Sabadell is in the middle of attempting to thwart a hostile takeover by rival Spanish bank BBVA.

Reports indicate that Metro Bank is in discussions about a possible takeover by buyout firm Pollen Street Capital; if this were to happen, it would be another nail in the coffin for the London Stock Exchange, as a further listed company would delist from the bourse. Pollen Street is one of the major shareholders in Shawbrook, a mid-sized bank which, in the past, has approached Metro Bank, (and also Starling Bank), about a possible merger. In November 2023, the high street lender was rescued through a US$ 1.25 billion deal, comprising US$ 440 million of equity – a third of which was contributed by Jaime Gilinski Bacal – and US$ 785 million of new debt; the Colombian billionaire now holds almost 53% of the bank. Since the bailout deal, Metro Bank has cut hundreds of jobs and sold portfolios of loan assets, whilst improving its operating performance. Shares in Metro Bank have more than trebled over the past twelve months, with a book value of some US$ 1.02 billion – well down on its 2018 level of US$ 4.74 billion. Last month, shareholders voted through a proposal which could see top executives being paid up to US$ 81 million apiece. With a possibility that a takeover was on the horizon, Metro Bank’s shares soared by 18.3% in Monday trading at its highest level in two years.

British Steel has secured a US$ 673 million, five-year contract to supply 337k tonnes of train tracks for Network Rail that could be a lifesaver for the Scunthorpe steelworks, as well as securing thousands of jobs. Two months ago, the Starmer government used emergency powers to prevent the blast furnaces from immediate closure by China’s Jingye, which had bought British Steel in 2020, of planning to shut down the plant’s blast furnaces. At the time, it took over control of British Steel but has so far stopped short of fully nationalising the business.  The contract will begin on 01 July, with the company continuing to provide Network Rail, with 80% of its track, needs and other European steelmakers to supply “specialist rail products” alongside,. The industry is still liable to pay a 25% Trump tariff on its exports to the US which is half the amount that other global steel companies will have to pay.

Bureaucracy must be the only reason why it has taken sixteen years – and US$ 1.61 billion – for permission to be given to build the Lower Thames Crossing, which will cost US$ 13.45 billion. The project – a twenty-three km road tunnel linking Tilbury in Essex and Gravesend in Kent, over four km of which will be under the River Thames – will be the UK’s longest road tunnel and has been granted US$ 794 million by the government. The Starmer administration is looking to source private finance  to finance the project, branding it a “national priority”. Construction should begin in 2026, ahead of an expected opening by 2032.

Despite the worrying state of the global economy, China continued its recovery trend last month, with its industrial added value, above designated size, increasing by an annual 5.8%. Most economic indicators headed north in May, including retail sales – 1.3% higher on the year to 6.4% – fixed asset investment, (up 3.7% YTD), and infrastructure, property, machinery and retail sales, by 3.7% YTD.

With Africa facing economically damaging Trump tariffs, China, on the other hand, has intimated that it is ready to drop them from all fifty-three African countries, (except for Eswatini excluded because it officially recognises Taiwan), with which it has diplomatic relations. The US tariffs include a 50% rate for Lesotho, 30% for South Africa and 14% for Nigeria. China has been the continent’s largest trading partner for the past fifteen years – with Africa exporting goods, to the world’s second biggest economy, worth around US$ 170 billion in 2023. When implemented, (no date has been fixed), it will be an extension of the deal made in 2024 for China to drop tariffs on goods from thirty-three African nations classified as “least developed”.

A consortium led by international energy investment company XRG, alongside Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle, has submitted a final non-binding indicative proposal to acquire all ordinary shares of Australia’s second-largest gas producer, for US$ 5.76 per share in cash. The deal to acquire Santos Limited for US$ 18.7 billion represented a 28% premium on its last closing price of US$ 5.76. Although the Board has unanimously sanctioned the deal it is subject to a binding Scheme Implementation Agreement being reached, no superior proposal emerges, an independent expert concludes that the proposal is fair, reasonable, and in the best interests of shareholders and approval by regulators in Australia and Papua New Guinea. The consortium has already agreed to maintain the company’s Adelaide headquarters, brand, and operational footprint in Australia and key international hubs. Its strategy is to develop a leading integrated global gas and LNG business. This acquisition could make ADNOC one of world’s top four LNG producers, rivalling American oil giants Shell and Exxon Mobil in terms of LNG production.

In April, Macquarie agreed to sell, in a 100% stock purchase transaction, three of its companies to Nomura. They were Macquarie Management Holdings Inc, a Delaware corporation, Macquarie Investment Management Holdings (Luxembourg) Sà rl and
Macquarie Investment Management Holdings (Austria) GmbH. This month, using some of the funds from its April sale, the Australian company finalised a partnership with Macquarie Asset Management as a 40% investor in Diamond Infrastructure Solutions, with an initial investment of US$ 2.4 billion, and a further US$ 3.0 billion option. DIS is a dedicated infrastructure company, with select U.S. Gulf Coast infrastructure assets.

With the Ontario Teachers’ Pension Plan trying to divest its US$ 13.46 billion stake in its European airport portfolio, Australia’s infrastructure giant Macquarie Asset Management is in the market to acquire significant stakes of 25%, 27% and 55% in three major UK airports – London City, Birmingham and Bristol. Earlier in the year, Macquarie had sold its stakes in AGS Airports — Aberdeen, Glasgow and Southampton. London City Airport, often favoured by business travellers, has been a focal point of this renewed interest. Hopefully, the bank is aware that Birmingham City Council, which co-owns the West Midlands airport, declared bankruptcy last year. Meanwhile, the East London hub received regulatory approval last August to increase its annual passenger cap from 6.5 million to 9 million, although a bid to extend its Saturday operating hours was rejected. In 2023, the airport saw traffic grow from 2.9 million to 3.4 million passengers. This possible purchase shows that the Australian group is hoping to become a major foreign investor in the UK – a move that will delight the embattled Labour administration crying out for foreign investment. Last October, the bank unveiled plans to invest US$ 26.71 billion in the UK over the next five years

However, the bank has faced criticism for its role in the financial and environmental woes of Thames Water, which is now battling mounting debts and public pressure over pollution. Macquarie Group led a consortium that acquired Thames Water in 2006 and gradually reduced their stake, eventually selling their remaining 26.3% interest in 2017. While Macquarie invested in upgrades to Thames Water’s infrastructure, they also took on significant debt to finance the acquisition, which is now a major point of contention. The prospective acquisition underlines Macquarie’s positioning as a key foreign investor in UK infrastructure, even as its past ownership of Thames Water continues to draw political scrutiny.

After agreeing to yield unusual control to the US government, Japanese firm Nippon Steel has completed its long-sought takeover of US Steel, in a US$ 14.80 billion purchase agreement; this will create one of the world’s biggest steelmakers and turns Nippon into a major player in the US. Nippon agreed to pay US$ 55 per share and take on the company’s debt, as well as to invest US$ 11.0 billion by 2028.  In the run-up to the 2024 election, there had been concerns about the foreign acquisition of one of the last major steel producers in the US, but Donald Trump finally agreed after the Nippon concessions satisfied his national security apprehensions. The Japanese company

also granted the US government a “golden share” in the company, giving the government say over key decisions, including the transfer of jobs or production outside of the US, and certain calls to close or idle factories. It also committed to maintain its HQ in Pittsburgh and install US citizens to key management positions including its chief executive and the majority of its board.

It has been a busy seven days for the septuagenarian US president, who celebrated his seventy-ninth birthday last Saturday. Three days earlier, he signed off on the Sino-US trade treaty, and on Sunday flew to Kananaskis for the G7 summit and yesterday he signed an executive order to reduce the 25% tariff to 10%, on 100k UK cars being shipped to the US, but kept the 25% tariffs on steel and aluminium, (most other countries face a 50% levy), and 10% on most UK goods. In return, the UK has scrapped a 20% tariff, within a quota of 1k metric tonnes of US beef, and raised the quota to 13k metric tonnes, and no tariff on ethanol up to US$ 700 million. The latest deal is a watered-down version of the one the UK prime minister signed in Washington last month. On top of that, he still has to call what action the US will take to put an end to the Iranian/Israeli ‘war’.

Whilst retaining rates unchanged, at 4.25%, the US Federal Reserve indicated that it would cut borrowing costs twice this year amid growing Trump pressure for less robust monetary policy. As expected, the Bank of England’s monetary polcy committee followed suit, keeping rates at 4.25%, by a 6 – 3 majority, Over the past ten months, rates have fallen four times. The Central Bank of the UAE also decided to maintain the base rate applicable to the Overnight Deposit Facility at 4.40%, in line with earlier decision from The Fed.

UK’s headline rate of inflation, in May, nudged 0.1% lower to 3.4%, driven by falling air fares, offset by rising food prices, (including chocolate because of a global cocoa shortage because of  poor harvests and in beef down to higher costs and rising global demand), and the higher cost of furniture and household goods.  The BoE expects inflation to hit 3.7% in September. It seems that Rachel Reeves could be right to say that there is “more to do” to bring inflation under control. Core CPI inflation – a measure that strips out volatile elements such as energy and food – eased 0.3% to 3.5%, while services inflation fell 0.7% to 4.7%.

The Confederation of British Industry has forecast a further slowdown in UK growth this year – by 0.4% to 1.2% – and next down to 1.0%. The CBI has warned that UK economic growth is being impacted by businesses facing higher employment costs, rising inflation and headwinds from the global trading environment.

Everyone can agree with the UK Transport Secretary, Heidi Alexander, who commented that HS2 is an “appalling mess” and that there had been a “litany of failure” surrounding the high-speed rail project, which will not be completed by its target date of 2033. She added that despite the project being downsized – with routes to Leeds and Manchester cancelled – it could still become “one of the most expensive railway lines in the world, with projected costs soaring by GBP 37 billion, (US$ 49.78 billion),” from when it was approved in 2012 to when the Tories lost the general election last year. She added cancelling it would be a “waste” of more than GBP 30 billion, (US$ 40.36 billion), already spent, and said there were “significant capacity constraints between Birmingham and London” that HS2 could address.

To be introduced so as to “restrict Putin’s war machine”, the UK prime minister is expected to unveil new sanctions against Russia, with the aim of the exercise to increase economic pressure on the Kremlin to show Vladimir Putin “it is in his and Russia’s interests to demonstrate he is serious about peace”. Downing Street said the new sanctions package would aim to keep up “pressure on Russian military industrial complex” but did not provide further details. The US will not be joining the other members of G7 in this latest plan. Eighteen months ago, the bloc had agreed to cap the price of Russian crude oil at US$ 60 per barrel, making that a condition of access to western ports and shipping insurance – this has not been an effective sanction mainly because the oil market price has dipped to almost that level.

However, a Sky News report notes that even though Russia is the most sanctioned country in the world,  it is still possible to buy western goods three years after they had been introduced. What seems to be happening is that as they are not directly coming into the country, but coming by ‘parallel imports’ entering the country via third countries, without the trademark owner’s permission. (Parallel imports were legalised to sidestep sanctions and to shield consumers from the impact of a mass exodus of foreign brands). The report gave the example of Coca Cola, which ceased operations here in 2022; on the same shelf in a Moscow supermarket, the drinks had been made in the UK, France, Poland and even Iraq. The same practice is being used on some sanctioned goods, like luxury cars, where they have arrived in Russia maybe via three, or even more, countries.

On Monday, the FTSE 100 hit a new record high of 8,884 points – 8.6% higher YTD – and this despite a miserable April when everything from household bills to tax to wages all headed in one direction, up – except for the UK economy contracting 0.3%. Over the same period, the DAX had risen by almost 20%. The main driver behind these figures has been Trump’s tariffs. Going forward, the outlook for the UK is uncertain, as all economies rely on trade which has many problems facing it, attributable to a raft of factors such as the Israeli Iranian proxy war, deadline dates drawing nearer to settle US tariffs, surging energy prices and eco-political global unrest. It ended the week on 8,775.

Today, the Office for National Statistics posted that there had been a monthly 2.4% decline in the quantity of goods bought last month, compared to April’s 1.3% growth return, because  of “inflation and customer cutbacks” accounting for the fall; this was felt across all categories, but led by food. May was the month when households would have noticed the hit from the so-called “awful April” above-inflation hikes to essential bills, including council tax, water, mobiles, broadband and energy, along with Trump tariffs. Furthermore, May also saw a 109k decline in payrolled employment, unemployment levels nudging higher to 4.6% and a US$ 2.43 billion jump in additional “compulsory social contributions” – largely made up of NICs – in May. Retail is the UK’s largest private sector employer – and it shows how this sector is being impacted by the October budget.

Another week and another U-turn by Keir Starmer who has set up a new national inquiry into grooming gangs, after he had earlier robustly argued that a national enquiry was unnecessary. His view has changed following the release of a report by Baroness Casey that laid out details of institutional failures in treating young girls and cites a decade of lost action from the 2014 Jay Review to investigate grooming gangs in Rotherham. The report also touches on the link between illegal immigration with the exploitation of young girls. There are some who may thank Elon Musk for this U-turn, as he had attacked the prime minister and the safeguarding minister, Jess Philips, earlier in the year, for failing children in the UK. At the time, both took the high ground and hit back at the tech billionaire, with the former citing his record of pressing charges against abusers, when he was the director of public prosecutions, and the latter claiming that Musk’s claims were ‘ridiculous’, and that she would be led by what victims have to say, not him.

A day after Rachel Reeves delivered her fairly upbeat spending plans, news was that the UK economy had shrunk by 0.3%, attributable to business taxes having increased in April, council/energy costs rising for households/businesses, and exports to the US slumping.  Her target has been to boost growth, with funding increases for the NHS and defence, and she has indicated that tax cuts have not been ruled out. It seems that the Chancellor is continuing to fail to acknowledge that there is every chance she will fail to see the economy grow. That being the case, tax increases are all but inevitable, more so because of a weaker economic outlook and the unfunded changes to winter fuel payments; this follows the U-turn after the results of local elections that saw US$ 22.67 billion going to nuclear power projects, including US$ 19.28 billion for the new Sizewell C nuclear power plant in Suffolk, and US$ 21.18 billion for transport spending in England’s city regions. Such investments will take years to make an economic impact.

Yet another U-Turn on the horizon could be Rachel Reeves reversing her decision to charge inheritance tax on the global assets of non-domiciles. The high number of wealthy individuals leaving the country, because of this tax change, has surprised the Chancellor and could result in “Rachel from Accounts” losing her job. It seems that both the Labour government, and the Chancellor, are fast Running Out Of Ideas!