UK growth revised higher in boost to next government; risk premium on French debt highest since 2012 – business live

Over in the US, the Federal Reserve’s favourite inflation measure has dipped.

The PCE price index rose by 2.6% in the year to May, down from 2.7% in April.

Encouragingly for the Fed, underlying inflation fell too. Core PCE, which strips out food and energy, also slowed to 2.6% in May, down from 2.8%.

Supercore PCE, which tracks the prices of core services excluding housing, also cooled….

This may reassure the Fed that inflation is easing back towards its 2% target, which could encourage it to consider cutting interest rates later this year.

James McCann, deputy chief economist at abrdn, says:

“Following an alarming acceleration at the start of the year we continue to see signs that inflation in cooling again, which will be a huge relief for the Fed and financial markets. This month’s data showed a tepid increase in underlying price pressures, with this weakness spread across the inflation basket. Alongside signs of easing activity rates these figures look consistent with the soft landing the Fed has been hoping for.

However, the central bank won’t be celebrating yet. Indeed, the message from Chair Powell and others has been that an extended run of softer inflation data is needed to make them confident that inflation heading sustainably back to their target. The upshot is that while the door remains open for a September rate cut, it seems more likely that a cautious central bank will wait a little longer before pulling the trigger on easing.”

Back in Paris, the stock market has hit its lowest level since late January.

The CAC 40 share index of France’s largest companies has dropped by 0.9% today, ahead of Sunday’s parliamentary vote.

David Morrison, senior market analyst at fintech and financial services provider Trade Nation, says:

Investors should prepare for potential market volatility on Monday, particularly in the, admittedly unlikely, event that Marine Le Pen’s RN party won an outright majority.

Travellers at Gatwick Airport have been hit by disruption today, when its runway was briefly closed.

Gatwick’s runway has reopened after being closed earlier today; the airport has blamed a “departing aircraft having hot brakes” for the disruption.

Happily, the runway has reopened – but plenty of flights out fo Gatwick have been delated (see the latest here).

Flight tracking website Flightradar24 reported the closure of the runway at 12.53pm and stated at 1.14pm it had reopened, PA Media reports.

Shares in Nike have tumbled 15% in pre-market trading, after the sportswear company reported a drop in sales.

Nike missed expectations by posting fourth-quarter revenues of $12.61bn for the last quarter of its financial year, to 31 May, a 2% fall compared with the previous year (when sales totalled $12.83bn).

Revenues for Nike’s Converse brand tumbled by 18% in the quarter, which the company says is primarily due to declines in North America and Western Europe.

Nike also forecast a surprise drop in fiscal 2025 revenue; it expects a mid-single-digit percentage fall in annual revenue, Reuters reports, as customers favour newer brands such as On and Hoka.

John Donahoe, President & CEO of Nike, told shareholders:

“We are taking our near-term challenges head-on, while making continued progress in the areas that matter most to NIKE’s future – serving the athlete through performance innovation, moving at the pace of the consumer and growing the complete marketplace.”