Key events
UK considers banning borrowing to buy cryptocurrencies
The UK is considering banning borrowing to invest in cryptocurrencies like bitcoin, amid concerns that it could lead people into a debt spiral.
The Financial Conduct Authority (FCA) shared details of a potential clampdown on cryptoassets, including forcing companies to be based in the UK if they deal with UK customers.
In a discussion paper published on Friday, the FCA said:
we are exploring whether it would be appropriate to restrict firms from accepting credit as a means for consumers to buy cryptoassets. We are considering a range of restrictions, including restricting the use of credit cards to directly buy cryptoassets, and using a credit line provided by an e-money firm to do so.
Retail investors would also be blocked from accessing crypto lenders, which come with a lot of complicated risks.
David Geale, FCA executive director of payments and digital finance, said, in an interview with the Financial Times:
Crypto is an area of potential growth for the UK but it has to be done right. To do that we have to provide an appropriate level of protection.
The higher reading in eurozone services inflation may be a fly in the ointment for the European Central Bank as it considers cutting interest rates further.
The ECB has cut interest rates three times in 2025 so far – and six times in a row – with another two cuts expected for this year. Higher inflationary pressure indicated by services prices rising could give some policymakers pause.
However, Franziska Palmas, senior Europe economist at Capital Economics, a consultancy, said it should not be too tricky:
April’s rise in services inflation is unlikely to worry ECB officials too much as it was probably driven mainly by Easter timing effects. We think services inflation will start falling again in the coming months and that US tariffs will prove disinflationary for the euro-zone, paving the way for two more rate cuts this year.
Eurozone unemployment edging up slightly could also support the case for cutting rates.
Eurozone unemployment was steady 6.2% in March – unchanged relative to a revised February reading.
The youth unemployment rate was 14.2%, down from 14.3% in the previous month.
Eurozone inflation steady at 2.2% in April
Eurozone inflation held steady at 2.2%, according to a flash reading of price pressures for April.
That was slightly above a 2.1% year-on-year inflation forecast from economists polled by Reuters.
However, underlying inflationary pressures appeared to increase. Core inflation – excluding volatile food, energy, alcohol and tobacco, jumped to 2.7%, up from 2.4%. That was higher than the 2.5% expected by economists.
And services inflation, which is closely watched by the European Central Bank, also rose to 3.9%, up from 3.5% in March.
Standard Chartered bank is right in the firing line from US tariffs: the FTSE 100 lender specialises in lending to Asian businesses. If global trade drops then its profits likely follow.
But in the first quarter, before the full impact of the tariffs, it managed to increase profits. It made $2.1bn in the first quarter of 2025, up 10% from the $1.9bn last year.
It set aside $23m during the quarter – a relatively small sum, so far – to guard against “heightened uncertainty around trade tariffs”.
Bill Winters, StanChart’s chief executive, said:
The subsequent imposition of trade tariffs has increased global economic and geopolitical complexity, and we remain watchful of the external environment. But our ability to help clients manage their business and wealth across borders in times of volatility reinforces our confidence that we can continue to improve returns.
Amy Hawkins
At one minute past midnight on Friday, eastern time, a US tariff exemption that has fuelled the rise of companies such as Shein and Temu, and stocked the wardrobes of millions of Americans with cheap fast fashion and other household goods, closed.
As part of Donald Trump’s flurry of tariffs on China, the US is closing a loophole that allowed low-value goods to be shipped into the US without paying any import fee.
The “de minimis” loophole, known by the Latin phrase for “of little importance”, was “a big scam going on against our country”, the US president said on Wednesday. “We put an end to it.”
“De minimis” refers to a trade policy introduced in the 1930s that allowed travellers returning to the US to bring goods with them worth up to $5 without declaring them to customs. Since 2016, the threshold has been $800 (£600).
That means prices for some goods are likely to rise. You can read more here:
Meta and Microsoft wowed investors on Wednesday night, but the reception for Apple last night was more mixed.
The share price of world’s biggest listed company is down 2.6% in pre-market trading, after its earnings came in lower than expected.
But more notable was the huge cost imposed on it by the US president.
Chief executive Tim Cook said that he expects Donald Trump’s tariffs to add $900m to its costs for the upcoming quarter that ends in June. That’s assuming, he said, that the global tariff rates don’t change again. But even the leader of America’s biggest company has no idea what Trump will do next. He said:
I’m not sure what will happen with the tariffs … It’s very difficult to predict beyond June.
Business leaders – with the exception of Elon Musk – have hardly a reward for paying court to Trump – although Apple did manage to get a tariff exemption for smartphones on the worst of the China levies. Cook himself was at the inauguration alongside other tech bosses (and in front of cabinet nominees).
Commodities companies are among the best performers on stock markets this morning.
They would be among the best placed to benefit from the US backing down in its trade war with China. The FTSE 100 has a lot of Europe’s big mining listings, and they are leading the way on Friday.
Chilean copper miner Antofagasta is up 2.8%, Australia-focused Rio Tinto is up 2.3%, Switzerland-based Glencore and Anglo American have both gained about 2%.
Looking down into the FTSE 250 index of mid-sized companies, it is Ferrexpo leading the way, up 14% – after gaining 22% on Thursday. It is focused on Ukraine, so the past couple of days have had two major fillips: the possibility of US-China talks unlocking global trade, and the US-Ukraine minerals deal. That deal may not be to Ukraine’s benefit, given that it is to repay aid that was given without those strings attached, but it could eventually clear the way for increased mining in the country.
Another upshot of the possible trade rapprochement: the FTSE 100 is on course for its longest ever winning streak.
The index closed up by 0.02% on Thursday, its 13th successive gain. Friday’s early gain suggests that – barring an abrupt turnaround – it could break the record for the most consecutive trading days in a row, set back in 2017.
Of course that run of gains only takes the FTSE 100 back to where it was on 2 April 2025, when Donald Trump’s “liberation day” tariffs liberated shareholders from trillions of dollars in value.
The gradual recovery in the month since then – can it truly only have been a month? – suggests that investors believe that the underlying conditions in the global economy are not actually that bad.
And the best way to manufacture a rising stock market index is to knock it down in the first place. Back in 2017, the previous longest streak was set with Trump at the top of investors’ minds as well.
European stock markets gain as China ‘evaluates’ offer of US trade talks
Stock markets have gained across Europe, as investors welcomed signs of a possible thaw in the trade war between the US and China.
Germany’s Dax gained 1.2% in the early trades, while France’s Cac 40 was up 1.4% – after both were closed over the May Day bank holiday. The Stoxx 600 index, which tracks big companies across Europe, rose by 0.9%. The FTSE 100 was up 0.9%.
The gains appeared to be a reaction to China’s government saying it is “evaluating” US approaches for trade talks. Reuters reported a statement from the Chinese commerce ministry:
“The US has recently taken the initiative on many occasions to convey information to China through relevant parties, saying it hopes to talk with China,” the statement said, adding that Beijing was “evaluating this”.
“Attempting to use talks as a pretext to engage in coercion and extortion would not work,” it said.
That came after a state-linked social media account said there was “no harm” in China engaging in talks – even if it also sounded a note of caution. Nevertheless, it comes after US administration officials and Donald Trump himself repeatedly signalled they want to cut tariffs.
Jim Reid, a strategist at Deutsche Bank, said:
This optimism has continued overnight after China’s Ministry of Commerce said that it’s evaluating trade talks with the US. The ministry said this comes as “the US has recently sent messages to China through revenant parties” and urged Washington to shows “sincerity” towards China. Against that background Asian equities are higher on the news (more below), with S&P 500 (+0.77%) and NASDAQ 100 (+0.50%) futures also moving higher even after unwhelming results from Apple and Amazon last night.
The FTSE 100 has jumped 1% at the open.
Shell and NatWest are both big contributors, up 4% and 3.7% respectively.
Shell profits drop; NatWest government stake drops below 2%
Shell has reported a 28% drop in profits to $5.6bn (£4.2bn) as big oil companies grapple with lower prices.
Oil prices have dropped from the heights hit after Russia’s invasion of Ukraine caused a global energy crisis. Shell’s adjusted profits were down from $7.4bn in the first quarter of 2024, or the record first-quarter profits of more than $9.6bn in 2023.
However, Shell’s performance this year was still better than analysts’ expectations of $5bn, according to forecasts collected by the company.
Brent crude oil futures were trading at $62 per barrel on Friday, compared with more than $130 at the peak of the energy crisis in early 2022. Oil companies are having to contend with Saudi Arabia’s apparent willingness to tolerate low prices in order to defend its market share, as well as Donald Trump’s desire for low energy prices – not to mention the threat of slower global growth or even recession from Trump’s trade war on the world.
Shell’s profits took a hit of £500m that went to the UK government under the energy profits levy, after chancellor Rachel Reeves raised the tax by three percentage points and closed “loopholes”.
NatWest takes a step closer to full private ownership
NatWest bank has taken a step nearer to full privatisation with a sale of a shares that takes the government’s stake to less than 2%, as the lender reported a 36% jump in profits.
The bank, formerly known as Royal Bank of Scotland, was the biggest recipient of a bailout during the financial crisis of 2008. The government’s stake has dropped from 84% when it was part-nationalised, and 38% in December 2023.
Recent months have not been the worst time to offload a stake in NatWest: in fact the bank’s share price has more than doubled since early 2024. (Of course, the flip side of that is that the government would have benefited from the price increase had it held on to the shares.)
Here is NatWest’s share price over the last decade:
Recent performance has looked strong. NatWest reported operating profit before tax of £1.8bn, up from £1.3bn in the same period last year, beating analyst consensus forecasts by £200m.
Paul Thwaite, NatWest’s chief executive, said:
In the face of increased global economic uncertainty, our customers remain resilient and we saw good levels of activity through Q1 2025. The strength of our balance sheet means we are well placed to help our customers navigate any challenges, whilst also investing in our business and delivering returns to shareholders.
The agenda
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9am BST: Eurozone manufacturing purchasing managers’ index (April; previous: 48.6 points; consensus: 48.7)
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10am BST: Eurozone inflation (April; prev.: 2.2% annual; cons.: 2.1%)
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10am BST: Eurozone unemployment (March; prev.: 6.1% annual; cons.: 6.1%)
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1:30pm BST: US non-farm payrolls (April; prev.: 228,000 jobs; cons.: 130,000)
