UK wage growth slows and unemployment rate rises as companies react to Iran war – business live

Before I go:

G7 finance ministers said in a joint statement that it is “imperative†to ensure a return to free and safe transit through the strait of Hormuz and ease strains on energy, food and fertiliser supply chains.

Ministers also agreed on the need for action to tackle trade imbalances in a fragmented global economy, saying the current situation was unsustainable, but were light on plans for concrete measures.

Finance ministers and central bank governors from G7 countries met in Paris for a second day of talks to discuss the economic fallout from the Middle East conflict and volatility on global bond markets.

They called for the immediate re-opening of the strait of Hormuz and the need to maintain pressure on Russia over Ukraine, agreeing common language on issues on which the group of seven advanced economies have not always seen eye-to-eye.

Hosting the talks, French finance minister Roland Lescure said participants also discussed diversifying the supply of rare earths and critical minerals and addressing global economic imbalances – a major theme of France's G7 presidency.

He said such imbalances are fuelling trade friction and risk a turbulent unwinding in financial markets, highlighting a pattern whereby China under-consumes, the United States over-consumes and Europe under-invests.

Lescure told reporters at the conclusion of the meeting:

We all share a common view. Those imbalances are not sustainable.

Oil prices are still down after Donald Trump said he would pause a planned attack on Iran, after Tehran tabled a new peace proposal. Brent crude has fallen 1.56% to $110.35 a barrel.

On Wall Street, stocks have opened lower, with the Nasdaq down 1%. In London, the FTSE 100 index is now flat, giving up earlier modest gains.

In government bond markets around the world, yields have risen slightly. The yield (or interest rate) on the UK's 10-year gilt reversed an earlier 5 basis point drop to rise by 2bps.

Our main story:

Unemployment in the UK has unexpectedly risen to 5% while wage growth has slowed, according to official figures, in the first snapshot of how companies are reacting to the impact of the Iran war.

The Office for National Statistics (ONS) said the rate of unemployment was up in the three months to March, from 4.9% in the three months to February, a rate that City economists had expected to hold steady.

More up-to-date tax data showed the number of payrolled employees dropped sharply in April, falling by 100,000, after a 28,000 decline in March. The fall was much sharper than expected and the biggest monthly decline since records began in 2014, excluding during the pandemic.

Vacancies also fell to their lowest level in five years, with a decline of 28,000 to 705,000 for February to April.

Suren Thiru, the chief economist at the Institute of Chartered Accountants in England and Wales, said:

These figures signal a growing distress within the UK's labour market as soaring labour costs and the fallout from the Iran war drive more businesses to reduce recruitment and limit pay awards.

The continued fall in job vacancies is a worrying sign of the strength of the labour market as it suggests that demand for staff is deteriorating quickly amid global headwinds and the growing financial squeeze on firms.

Thank you for reading. We'll be back tomorrow. Take care! – JK

Investors have repeatedly challenged Shell over its fossil fuel-focused straegy at the oil giant's annual meeting in London.

The company's board defended its ongoing investments in oil and gas as shareholders gathered at the Sofitel Hotel at Heathrow Airport today.

A group of 21 institutional investors, led by Dutch campaign group Follow This, filed a proposal calling for the company to publish a strategy on how it plans to create shareholder value under the scenario that fossil fuel demand falls as the world transitions to clean energy.

The resolution received 12.7% of investor votes, according to provisional figures.

Campaigners behind the resolution said the double-digit support shows “significant doubt among investors†over Shell's fossil-focused strategy.

But the result also marks a drop in support for shareholder climate resolutions from previous years – proposals received 20.6% in 2025 and saw a peak of 30.5% in 2021.

Shell's board urged shareholders to oppose the resolution, as did major proxy advisors ISS and Glass Lewis, which can have sway over how big investors vote. The company argued that it already addresses the issue in existing reports.

In his opening remarks, chairman Sir Andrew Mackenzie said he “won't give you a single answer†when the question of what Shell will look like in 10 to 30 years.

But what I can tell you is this: where demand rises, our determination is to help meet it.

Where the energy system is ready to change, we are ready to move with it. And where the world looks for a business that can navigate the complexity of the decades ahead, Shell can be that business.

The oil major revealed huge profits for the first quarter of the year thanks to rocketing oil prices caused by the Iran war.

Chief executive Wael Sawan said the crisis has provided “another reminder of the fundamental importance of energy†as Iran's stranglehold on the strait of Hormuz continues to squeeze global oil and gas supply, sending energy prices rocketing.

Sawan argued that the world “needs to maintain secure energy supplies while accelerating the transition to affordable low-carbon solutionsâ€.

The company has watered down several short-term and medium-term climate targets, citing uncertainty in the energy transition, though it has maintained its plan to cut emissions to net zero by 2050.

Confronting the board about its “carbon-based business model†during a Q+A session, Mark van Baal, founder of Follow This, highlighted how Shell cut its dividend payments to shareholders by 66% when oil demand plummeted during the 2020 coronavirus pandemic.

“Imagine what happens when it declines structurally,†he said before asking the board why they do not want to publish a plan for this scenario.

It is easy to be distracted by temporary profits and lose sight of the long term.

In response, Sawan said the board believes the resolution could

create a precedent for recurring single source scenario-based disclosure, which ultimately adds costs without helping our investors.

He added that the resolution would not just be “damaging but duplicative†because the issue is already covered in existing reports it shares.

Van Baal was among many shareholders who quizzed the board about its climate targets, progress on cutting planet-heating emissions, and investments in oil and gas projects in the face of the potential for declining demand.

Separately, the protest group Fossil Fuel London staged an action to coincide with the AGM outside the firm's London headquarters.

The British Chambers of Commerce said the HS2 rail projects is “crucial to business growthâ€.

The HS2 high-speed railway will now cost up to £102.7bn and trains will not start running between London and Birmingham until as late as 2039, the government has admitted – £70bn more and 13 years later than originally promised.

The BCC's director general Shevaun Haviland said:

The HS2 project is a crucial part of creating a modern transport network that helps business boost growth across the UK. We welcome the government's recommitment to the project today.

Better rail links are essential for the future prosperity of our regional economies, supporting businesses, jobs and investment. Rail is also crucial to the movement of goods nationwide.

The construction project itself will bring huge benefits to SMEs through the HS2 supply chain. While cost management is essential, HS2 must stay on track for businesses to invest and plan for the future.

Ministers must also remain laser focused on delivering Northern Powerhouse Rail. The project will provide vital connectivity that can drive forward economic growth across large parts of the north.

British Airways has delayed resuming flights to Dubai, Doha and Tel Aviv by a month to 1 August, the carrier's website showed. The airline has suspended services to the region because of the Iran war.

The war prompted a number of carriers to cancel flights to and from the region since the US and Israel first launched missile strikes in late February. BA, owned by IAG, said:

Due to the ongoing situation in the Middle East, we have made further changes to our flying schedule to provide greater clarity for our customers.

We're keeping the situation under constant review and are directly in touch with affected customers to offer them a range of options.

The long-haul airline will offer a reduced flight schedule to the Middle East when it resumes services, and use the aircraft to operate more direct flights to India and Kenya, it said last month.

It has permanently dropped Jeddah as a destination. BA also intends to reduce services to Dubai, Doha, Riyadh and Tel Aviv to one daily flight.

Pub chain Greene King has agreed to sell its Old Speckled Hen ale brands to the Spanish owner of Estrella lager, making it the latest in a series of British beers to be snapped up by overseas buyers.

Barcelona-based brewer Damm has agreed to buy all the Old Speckled Hen lines, including its non-alcoholic and golden ale versions.

Greene King said it would continue to brew the ale at its Westgate site in Bury St Edmunds during the sale “handover periodâ€, but that the process would later move to Damm's brewery in Bedford, which it opened last year.

Nick Mackenzie, the chief executive of the 227-year-old pub chain, said the company was “delighted to have secured a partner in Estrella Damm who will continue to brew the ales in the UKâ€.

The companies did not disclose the value of the sale, but said after the deal is complete, Old Speckled Hen beers will still be available in Greene King pubs, as well as major supermarkets in the UK and in the off-trade.

Greene King said it planned to focus on selling its beers in its own pubs and UK on trade, moving away from the off trade.

Here is our analysis of this morning's UK job market data.

News that the UK unemployment rate jumped back to 5% in March appears to be the latest evidence that the Iran war has snuffed out the economic upturn Rachel Reeves had hoped to see in 2026.

The Office for National Statistics reports that, after an unexpected fall in the unemployment rate to 4.9% in last month's data, it ticked back up to 5% between January and March – the first set of figures affected by the conflict.

The chancellor wanted this to be the year she could claim to have brought stability to the economy and public finances, with falling inflation and widely expected interest rate cuts restoring the feelgood factor.

Instead, the Iran war has unleashed a fresh wave of inflation – with the latest data on this to come on Wednesday – and rocked business confidence.

More timely employment data, using PAYE data from HMRC, suggest a more significant shock may be under way than is obvious from the standard Labour Force Survey.

The number of payrolled jobs in the economy fell 100,000, or 0.3%, in April on this measure – though the ONS stresses that this is a provisional estimate. That was the third-largest single monthly fall since this series began in 2014. The annual rate of decline in payrolled jobs, at 0.7%, was the fastest for five years.

Scotland Yard has said it hopes to bring criminal charges against 77 companies and individuals for the 2017 Grenfell Tower fire, in which 72 people died.

The lead investigator, Garry Moncrieff, said his team of 220 detectives had gathered “strong evidence†of potential wrongdoing.

Police said they were sending a series of files of evidence to prosecutors later this year seeking a decision on whether criminal trials should be held.

The Crown Prosecution Service said it expected to make decisions on charges by June 2027, the 10th anniversary of the disaster.

Police say files will be sent to the CPS seeking charging decisions about 57 individuals and 20 companies.

Moncrieff said:

It's our job to make sure that we do a fair, thorough, and comprehensive investigation, so that charging decisions can be taken, and that fairness runs throughout everything that we do.

The HS2 high-speed railway will now cost up to £102.7bn and trains will not start running between London and Birmingham until as late as 2039, the government has admitted – £70bn more and 13 years later than originally promised.

The transport secretary, Heidi Alexander, said that the truncated railway would not be entirely completed until as late as 2043.

The figure is the first official estimate of HS2's budget in 2026 prices. Alexander said the total cost would be between £87.7bn and £102.7bn, with one third of the rise due to inflation.

The first trains running from Old Oak Common in west London to Birmingham will now run between 2036 and 2039, with the full railway running to London Euston due to be completed between 2040 and 2043.

Alexander said that the forecasts were now “built on solid foundations with credible estimates as rangesâ€.

She blamed the Conservative government for standing by and watching “the world's most expensive slow-motion car crashâ€, saying that Labour had inherited a “litany of failureâ€.

Alexander added:

I can confirm that the previous government spent most of HS2's budget without laying a single mile of track. That is the shocking legacy.

If it seems like an obscene increase in times and costs, that is because it is. And if it seems like I'm angry, I am.

She said that the government had considered cancelling the entire project, but concluded that “it could cost almost as much to cancel the line as finish it.†She promised: “We will deliver.â€

She said, however, that trains would be operated at lower speeds, to save around £2.5bn, reducing the top speed from 360km/h to 320km/h, in line with most international standards. The original design, she said, had been:

A massively overspecced folly… If we were a country the size of China I could understand it.

There have been protests outside Shell's headquarters, to coincide with the oil giant's annual general meeting (AGM), as usual.

Fossil Free London staged a protest at Shell's HQ, placing a Shell oil barrel outside the building. Behind it, campaigners dressed as oil executives drank “oil†(actually Treacle) from champagne glasses.

The protest was organised with the support of frontline communities in the Philippines and the Niger Delta, which are lodging cases against Shell in London courts.

However, inside the AGM at a hotel at Heathrow, Shell's board insisted that fossil fuels will remain important, despite the climate crisis.

The global events of the last few months (i.e. the Iran war) have shown that meeting oil demand will be essential for decades to come, Shell chief executive Wael Sawan told shareholders.

The company's chair, Albert Manifold, said solar energy and windfarms are not Shell's strengths.

Sweden has decided to order four navy frigates from France's state-owned Naval Group in a Skr40bn (£3.2bn deal), in a blow to the UK's Babcock International.

The new NATO member is seeking to boost its defence capacity in the Baltic Sea, following Russia's invasion of Ukraine. The first of the four warships, which will be the Swedish navy's biggest ships, is expected to be delivered in 2030.

Naval Group won the race, beating a joint bid from Britain's Babcock and Swedish carmaker Saab, and one from Spain's Navantia.

The purchase of the French Defence and Intervention (FDI) frigate model will be Sweden's biggest military investment since the 1980s, prime minister Ulf Kristersson said. He told a press conference on board the Swedish naval corvette HMS Harnosand, docked in central Stockholm for the occasion, according to AFP:

The Baltic Sea has never in the modern era been as exposed, questioned and contested as it is now.

With this decision I am convinced Sweden is contributing to making the Baltic Sea considerably safer in the future.

Adding the frigates to its naval arsenal will triple Sweden's air defence capabilities, Kristersson said.

The French president, Emmanuel Macron, said on X that Sweden's decision reflected the countries' mutual trust, after France agreed to buy Saab's GlobalEye airborne early warning and control systems and Paris invited Sweden to take part in talks on European nuclear deterrence.

Johan Norlen, chief of the Swedish navy, said the frigates were important in keeping the Baltic Sea open for civilian and military transport to Finland and the Baltic States in case of an escalated conflict.

With our corvettes and frigates we are building naval operational control in the Baltic Sea together with our NATO allies.

Sweden is also building a new class of submarines, for delivery to Poland.

The UK housebuilder Crest ‌Nicholson has postponed its ​half-year results to ​16 July, as it remains locked in â discussions with its lenders ​for a temporary relaxation of ​its banking covenants.

The builder, which has already slashed its annual profit forecast because of high interest rates ​and rising building costs, warned in January that it may breach ​its ​interest cover â covenant as early as April in ​case of a severe ​housing downturn.

Crest â said today that talks with banks are “progressing constructively†and are â expected to ​conclude by mid-July. It has been struggling for months, and shut its Chiltern divisional office in December with the loss of 50 jobs.

The British electricals retailer Currys is leading the risers on the FTSE 250 index, with the shares up 12%, after it raised its full-year profit forecast, defying a slowdown in the retail sector.

Currys, which sells computers, video games, televisions, mobile phones and white goods, said recent trading has been “very solid†and has not been affected by the ramifications of the US-Israeli-war on Iran.

Underlying sales in the UK and Ireland, its main business, rose 3% in the year to 2 May, while sales in Nordic countries climbed 6%. The company is now forecasting a full-year profit of £191m, up 18%. This is up from its previous estimate of £180m to 190m).

Alex Baldock, the chief executive, said:

Recent trading has been very solid; we've not yet seen an impact from the Middle East conflict, and our energy costs are well hedged for the coming year.

This performance, combined with our strong balance sheet, means we are well positioned to navigate any market volatility ahead, tap into exciting growth opportunities and continue returning capital to shareholders.

Mel Stride, the shadow chancellor, has finished his speech and it is clear he wants to position the Conservatives as the only party that can rebuild the public finances.

He defended the Tories' past record on fiscal policy, insisting it was only because they had “fixed the roof,†from 2010, when George Osborne was chancellor, that they could afford to support consumers and businesses through the pandemic. He did not mention Liz Truss.

Stride attacked Rachel Reeves, the chancellor, for planning to increase borrowing by a quarter of a trillion pounds across this parliament (this is because she has changed the fiscal rules, to allow significantly more investment).

As well as attacking Labour, he criticised Nigel Farage's Reform party, saying

Reform repeatedly come out with unfunded promises or policies which they claim a fully costed, but for which the numbers simply do not add up.

The shadow chancellor restated the Conservatives' “golden rule,†which states that at least half of any savings a Tory Treasury made, would be used to cut the deficit.

We can't afford the nice stuff, like tax cuts, unless we make sure we are balancing the books. Getting debt off our backs is central to the vision of a brighter future.