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The Early Viewer
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Issue No. 009 · 31.07.26
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The Morning Message
Morning all.
The main thing to know is that the Bank chose to hold rates at 3.75% on Thursday, following the ECB and the Fed's decision to do the same. Bank officials are still wary of further inflationary pressure driven by oil prices but not enough to raise rates at present.
Lloyds follows suit with Barclays demonstrating strong growth in its lending business, in part owing to currently elevated interest rates. Shell's impressive earnings results speak to a market where oil prices remain high amidst wider geopolitical tensions. BAE's returns reveal one clear truth: Europe is rearming. The company is benefiting not only from increased demand for Typhoons, but also new technologies such as drones and autonomous aircraft.
There are a few more of the big beasts to come, and we will be keeping you up to date over the coming days.
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Markets
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| Index / Asset |
Value |
Change |
| FTSE 100 |
10,897.27 |
▼ 0.10% |
| FTSE 250 |
24,079.14 |
▲ 0.34% |
| GBP/USD |
1.3468 |
▲ 0.73% |
| UK 10Y Gilt Yield |
+4.98% |
▼ 5bps |
| Brent Crude (ICE) |
$89.31 |
▼ 1.58% |
| Bitcoin (XBT) |
64,788.87 |
▲ 2.12% |
| Gold |
$4,113.72 |
▲ 1.13% |
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Figures are official market closes where available; otherwise, prices are shown as of approximately 5.30pm BST on 30 July 2026.
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The Number
3.75%
The Bank of England base rate, as the Bank decided to hold and not raise.
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The Big Story
Hold tight
There were no real surprises when the Bank of England decided to hold rates at 3.75% on Thursday. The real story was in the Bank's commentary, which suggests further rate rises later this year remain possible if inflationary pressures persist.
The Bank's supporting analysis told a similar tale in terms of the factors behind the decision. In the decision, the Bank noted that conflict in the Middle East has raised energy prices, leading to higher fuel costs and utility bills for households.
While inflation figures are slightly better than anticipated, the Bank is aware this could change if energy prices remain elevated and businesses are forced to pass on increased costs to customers in the form of higher prices.
The Bank also believes current interest rates are already slowing the economy. Higher mortgage payments leave households with less money to spend, while relatively high unemployment has reduced pressure on employers to increase wages. The Bank believes those factors should, for now, help keep inflation under control.
The Bank of England will be monitoring events in the Middle East closely, however, and stated a determination to get inflation back down to the 2% target, from 2.6%.
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The Boardroom
A number of the FTSE titans reported on Thursday across industries including banking, consumer and defence.
Lloyds Banking Group
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First-half profit rose to £4.3bn from £3.5bn, supported by higher interest income (from the lending business) and continued lending growth.
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The bank increased its interim dividend by 30% and announced a £1bn share buyback, while reaffirming its 2026 guidance.
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Why it matters: Lloyds' strong performance means it can reward shareholders with a higher dividend and share buyback without changing its expectations for the year.
Shell
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Shell generated $9.8bn from its core operations in the second quarter, supported by higher oil and gas prices, record production in Brazil and record refinery utilisation.
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Shell announced another $3bn share buyback, marking the 19th consecutive quarter it has launched a buyback of at least that size.
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Why it matters: Higher energy prices driven by geopolitical tensions and efficient operations continue to generate huge cash flows. This has allowed Shell to massively increase investment and also return significant value to existing shareholders through consecutive buybacks.
BAE Systems
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Sales rose 9% and profits continued to grow.
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BAE increased its full-year guidance after winning new defence contracts and growing its order backlog to £84bn.
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Why it matters: Europe is rearming. Rising defence spending by governments is providing BAE with years of future work. The results also indicate a variety of contracts from Typhoon fighter jets and dreadnought submarines, to drones and autonomous aircraft.
Anglo American
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Profit from its continuing businesses rose strongly to $4.0bn, helped by higher copper prices, solid production and increased cost control.
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Anglo agreed the sale of its steelmaking coal business and continues to work on selling De Beers, while progressing its planned merger with Teck.
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Why it matters: Anglo is repositioning itself around copper and other metals expected to benefit from long-term demand, while selling businesses that no longer fit its strategy.
British American Tobacco
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Revenue rose 2.9%, while earnings per share increased 7.9%. The company said it remains on track to meet its full-year guidance.
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Revenue from smokeless products grew 18%, meaning they now account for almost 20% of group revenue.
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Why it matters: BAT is using the cash generated by its traditional cigarette business to invest in smokeless nicotine products, reflecting the industry's long-term shift away from smoking.
Rolls-Royce
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Profits from its core operations jumped 46% to £2.5bn, with strong performance across its civil aerospace, defence and power systems businesses.
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Rolls-Royce raised its full-year profit and cash flow guidance and continued returning cash to shareholders through dividends and share buybacks.
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Why it matters: Rolls-Royce is benefiting from air travel recovering, increased defence spending and growing demand for power infrastructure. In addition to this, its productivity programme has also helped with profitability.
London Stock Exchange Group
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First-half revenue rose 7% to £5.0bn, while profit before tax increased 29% to £1.3bn.
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LSEG raised its full-year revenue and profit margin guidance, and returned £2.1bn to shareholders through share buybacks in the first half.
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Why it matters: The results suggest demand remains strong across LSEG's data, analytics and trading businesses.
SEGRO
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Earnings per share rose 6.6%, supported by rental income growth of 5.3% from its existing properties and strong demand for industrial and logistics space.
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SEGRO continued expanding its data centre pipeline, increasing its strategic power capacity to 3.0GW.
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Why it matters: Growing demand for warehouses, logistics hubs and data centres is allowing SEGRO to raise rents and invest in new developments that should help drive future earnings.
Haleon
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First-half organic revenue grew 2.6%, with growth improving to 3.1% in the second quarter as North America recovered and emerging markets remained strong.
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Profits rose 8.2%, helped by productivity savings and higher margins, while full-year guidance was left unchanged.
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Why it matters: Haleon is still growing despite a difficult consumer backdrop, but a lot of this is down to higher efficiency rather than rapid sales growth.
Schroders
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Profits increased 46% to £460m.
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Assets under management reached a record £868bn, although the group still recorded £4.2bn of net client outflows.
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Why it matters: Assets rose mainly because current market conditions and investment performance increased the value of the money Schroders already manages, as opposed to clients adding more money.
Informa
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Revenue rose 6.8%, driven by strong demand for its live events and academic publishing businesses, while the company reaffirmed its full-year guidance.
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Informa increased its share buyback programme to £350m and raised its interim dividend by 6.9%.
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Why it matters: Companies are continuing to spend on events, research and specialist data, as a means of finding customers and building connections.
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Around the World
Further US strikes on Iran
The US launched a new wave of strikes against Iranian military targets after Iran attempted to attack American forces in Jordan earlier this week.
The latest exchange marks another escalation in the conflict, with both sides continuing to trade attacks despite earlier hopes of renewed diplomacy.
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Why It Matters
Continued tensions raise the risk of further disruption to the Middle East, a region critical to global energy supplies and international shipping.
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Quick Hits
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US economic growth slows. The US economy grew at an annual rate of 1.5% in the second quarter according to the Commerce Department, down from 2.1% seen in the first three months of the year.
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JLR plans job cuts. Jaguar Land Rover announced plans to cut significant numbers of jobs.
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Suffolk wildfires rage. Fires in Suffolk raged on Thursday as helicopters dropped sea water to try and temper the blaze.
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Prime Minister makes noises on North Sea drilling. Andy Burnham has responded to President Trump's calls for the UK to start drilling in the North Sea for oil and gas, by suggesting there could be a change in policy.
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The Take
When the Bank decided to hold rates in June, it also issued a word of warning.
Policymakers were concerned that higher global energy prices could eventually feed through into the wider UK economy. In particular, they worried that higher business costs could lead to:
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businesses passing higher costs on to consumers through higher prices
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workers demanding higher wages to keep up with those rising prices
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businesses then raising prices again to cover those higher wage bills
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This is known as a wage-price spiral. Once it takes hold, inflation can become much harder to bring back under control.
Higher interest rates help to break that potential spiral. More expensive mortgages and borrowing leave households with less money to spend elsewhere, reducing demand in the economy. With consumers spending less, businesses find it harder to keep raising prices.
Recent inflation and employment data suggest that a wage-price spiral hasn't taken hold (yet). Inflation has come in slightly below expectations and wage growth has eased. Current interest rates appear to be helping slow inflationary pressures.
For now, that allows the Bank to hold rates while it watches how events in the Middle East affect energy prices in the coming months.
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Before You Go
And that's us.
Until tomorrow,
Sean
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