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  1. All major US share indexes rise by more than 1% following strong trading in Europe
  2. FTSE 100 closes up 2.64% and FTSE 250 closes up 3.58%
  3. Sterling rises 0.88% to $1.3342
  4. US Volkswagen owners get compensation for emissions scandal
  5. Chancellor George Osborne warns of tax rises and spending cuts

Live Reporting

By Karen Hoggan

All times stated are UK

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Good night

Another day draws to a close on the Business Live page.

Many thanks for following us.

Don't forget we'll be back bright and early tomorrow morning at 6am. 

Do join us then for all the latest from the world of finance and business.

Smartphone for less than £3

Freedom 251

The BBC's Shilpa Kannan was given a first look at a smartphone costing less than £3, set to launch in India next week. 

Freedom 251 is an Android phone advertised by the Indian company Ringing Bells at 251 rupees (£2.77).

In the hand, it feels somewhat like Apple's iPhone 5, says our correspondent. Read more here

Wall Street claws back some losses

Wall Street sign with Stock Exchange sign behind

Wall Street recouped some losses on Tuesday - following on from gains seen in Europe earlier. 

Investors were grabbing the opportunity to buy up sales which have fallen sharply in value since the Brexit vote last week. 

The Dow Jones closed up 1.57% at 17,409.72.

Nasdaq was up 2.12% at 4,691.87.

And the S&P 500 ended at 2,036.09 - a rise of 1.78%.

 "After a few days of a lot of volatility, it looks like we have found some stability," said TD Securities' European Head of Currency Strategy Ned Rumpeltin. 

But Paul Nolte, portfolio manager at Kingsview Asset Management said he thought it was a "short-lived rally".

Moody's cuts its outlook for UK banking system

Moody's cut its outlook on the UK banking system to 'negative' from 'stable' on Tuesday, following the the referendum vote in favour of Brexit. 

Moody's also cut the outlooks on the ratings of 12 UK banks and building societies, citing reduced profitability after the referendum vote. 

Barclays, Lloyds Banking Group and Santander were among the banks downgraded by Moody's. 

"We expect lower economic growth and heightened uncertainty over the UK's future trade relationship with the EU to lead to reduced demand for credit, higher credit losses and more volatile wholesale funding conditions for UK financial institutions," Moody's said in a statement. 

Moody's changed the outlooks on the ratings of eight banks and building societies to negative from stable - Barclays, HSBC Bank, Santander UK, Coventry Building Society, Leeds Building Society, Nationwide Building Society, Nottingham Building Society and TSB Bank), and the outlooks on the ratings of two issuers to stable from positive -  Lloyds Bank and Principality Building Society. 

Moody's also changed the outlook on the UK government guaranteed senior unsecured debt instruments to negative from stable of the aforementioned issuers, Lloyds and Barclays, as well as Bradford & Bingley and NRAM (No1) Ltd.  

However, the credit rating agency affirmed the credit rating of these 10 banks - along with Bradford and Bingley and NRAM.

It also affirmed the rating of four UK banks and building societies, whose outlooks were maintained - The Royal Bank of Scotland Group, Skipton Building Society, West Bromwich Building Society and Yorkshire Building Societ. 

Moody's said it believed that the potential impact of the referendum result on these institutions is outweighed by more firm-specific credit considerations.

Douglas Carswell: No going back ...

Douglas Carswell

Douglas Carswell is UKIP's only MP.

He said there was no going back on the referendum result.

I'm not gonna choose who the next Prime Minister is but you can bet one thing. I will do everything I can to make sure that the next Prime Minister honours the promise to the British people. We need to be sensible about this. We need to proceed on the basis of goodwill. But we are leaving the European Union, make no mistake about that.

Douglas CarswellUKIP MP

Will Brexit happen?

Financial Times editor tweets ...

Tech bosses: Look forward not back post Brexit

BBC technology correspondent tweets

Thousands demonstrate in France against labour law reforms

BBC World Service

French demonstrators

Tens of thousands of people have been demonstrating again in France against plans by the Socialist government to reform the country's labour laws, reports BBC World Service.

Police officers were called in to maintain law and order in Paris, after previous demonstrations turned violent. There were 30 arrests. 

The unions, who have organised eleven protests in three months in Paris say they have no intention of giving up the fight.

The proposed law would make it slightly easier for companies to regulate their own working hours and overtime rates.

CBI boss: UK must have tariff and barrier free access to single market

CBI director general Carolyn Fairbairn was one of the business leaders who attended today's meeting with Business Secretary Sajid Javid. 

For the past three days the CBI has been consulting CBI member firms, of all sizes, in every sector and region.

The UK has a long history of being an open and collaborative trading nation and that must continue. The Government must communicate and demonstrate that the UK is open for business and investment, including by keeping critical infrastructure projects and spending decisions on track. We must give urgent long-term reassurance to the thousands of EU migrants already working in the UK that they can stay here. A visible commitment to openness must be at the heart of our new relationship with the EU. In practice this means tariff and barrier free access to the single market; maintaining trade deals around the world; attracting and keeping skills; and working out the trade-offs between these three.

Carolyn FairbairnCBI director general

Want to know how Brexit will affect you?

BBC Business tweets

EU membership 'important factor' in Vodafone's growth

More on the Vodafone story - and the company's statement points out that the "very large majority of our 462 million customers, 108,000 employees and 15,000 suppliers are based outside the UK".

It goes on to say: "The UK's membership of the European Union has been an important factor in the growth of a company such as Vodafone. Freedom of movement of people, capital and goods are integral to the operation of any pan-European business as are single legal frameworks spanning all Member States. 

"Access to the emerging European digital single market should represent a significant opportunity for the UK, one of the world's leading digital economies."

However, the statement also makes clear that it's too early to make a decision about the future location of the HQ. 

"It remains unclear at this point how many of those positive attributes will remain in place once the process of the UK's exit from the European Union has been completed," it says. 

"It is therefore not yet possible to draw any firm conclusions regarding the long-term location for the headquarters of the Group.

"We will continue to evaluate the situation and will take whatever decisions are appropriate in the interests of our customers, shareholders and employees."

Vodafone 'could consider move'

Vodafone logo

Vodafone says it could consider moving its HQ out of the UK, according to the Financial Times.

The telecoms company is reportedly considering the move because of the "uncertainty" about how many of the "positive attributes" of being in the EU post Brexit.

Project Tina or Project Atlantic?

Sir Philip's Arcadia group had a meeting with The Pensions Regulator on Monday about plugging the pension deficit, it has emerged. Mr Khan was at the meeting. 

He says the plan is called "Project Atlantic".

Frank Field can't resist having a joke, suggesting the new plan should really be called "Project Tina" as that's where the money to plug the hole will come from. 

Chappell became 'closer and closer' to BHS events

Dominic Chappell started out as driver

Retail Week tweets

BHS pension deal is 'work in progress'

Mr Khan is reluctant to talk in detail about the pension deal being worked on for BHS pensioners, but says it's "a work in progress".

The BHS pension scheme deficit of £571m is the most contentious of the issues being investigated by MPs.

Deloitte's Neville Khan says not part of Sir Philip's inner circle

Deloitte partner and Sir Philip Green adviser Neville Khan is now in front of the committee. He says descriptions of him in the media as part of Sir Philip's inner circle are incorrect, and that meetings with him were "very sporadic".

"Unless there was  a case that I was involved in I wouldn’t see him from one year to the next. The first engagement I had with him was in 2013," he says.

Paul Sutton: 'Blackmailed'

Paul Sutton claims he was being blackmailed and this is why a dossier about him was sent to Sir Philip Green.

The dossier said he had been found guilty of fraud in France and extradited.

Mr Sutton said that information was incorrect.

However, it was given to Sir Philip and went around BHS before he could do anything about it.

As a result he had to pull out of the BHS deal.  

He said he had a “ campaign” being waged against him.

Sutton:'never thought Chappell could run BHS'

Paul Sutton, who introduced Dominic Chappell, former owner of BHS, to Sir Philip Green - is also giving evidence to the select committee of MPs. Mr Sutton was also an early bidder for BHS before Mr Chappell entered the fray.

He tells them: “I never thought in a million years he (Dominic Chappell) could run BHS stores.“

Javid: Britain 'open for business'

Sajid Javid

"Britain is open for business," Business Secretary Sajid Javid has said. 

He made his remarks in a statement released following a meeting he held with the bosses of big companies and business organisations. 

He added "This government is still 100% committed to making the UK the best place in Europe to start and grow a business.

"This is not the time for hasty decisions that will be regretted later.

"Rather, it is the time for government to work with businesses large and small up and down the country so they don’t just deal with the challenges that the result brings, but are also able to embrace the opportunities that it creates.

"The biggest issue raised was the need to secure continued access to the single market.

"While I’m not in a position to make promises, I assured everyone that my number one priority will be just that in the negotiations to come." 

Javid 'need to secure continued access to the single market'

The business secretary Sajid Javid ha been holding a  round table meeting with business leaders this afternoon in the wake of the Brexit vote. 

Afterwards he had this to say:

The biggest issue raised was the need to secure continued access to the single market. While I'm not in a position to make promises I told everyone that my No.1 priority will be just that in the negotiations to come.

Sajid JavidBusiness secretary

London shares bounce back

London Stock Exchange sign
AFP Getty Images

Britain's top share index bounced back on Tuesday following steep falls yesterday and on Friday. Insurers and banks, hit hard following the Brexit vote, led the market higher. 

"Equities look to have found their footing post-Brexit despite political turmoil in Westminster," Mike van Dulken, head of research at Accendo Markets, said. 

 "Bargain-hunting may be helping as opposed to emergence of genuine support as markets adjust to a new normal and the prospect of the UK outside the European Union." 

The FTSE 100 rose by 2.64% to 6,140.39.

The FTSE 250 - seen as a better indicator of UK businesses - closed at 15,503.06 - that's a rise of 3.58%.

Dellal: 'Less happy now' about Chappell tax loan

Dominic Chappell still owes Alex Dellal £75,000, he told a committee of MPs. 

The matter is now in lawyers’ hands, he said. 

The loan was advanced at the rate of 1% a month, to help Mr Chappell with a tax bill. The original figure was £150,000 and half was repaid on time. 

When asked if he was happy with the situation regarding the loan, Mr Dellal said “I’m less happy now than the day I did it."

MP asks ' was Chappell gift that keeps on giving?'

Sunday Times retail and property reporter tweets ...

The Business, Innovation and Skills Committee and Work and Pensions Select Committee are holding further evidence sessions this week as part of their inquiries into BHS.

First up this afternoon is Alex Dellal of the property investors Allied Commercial Exporters who lent former BHS owner Dominic Chappell money to buy properties. 

View more on twitter
View more on twitter
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Fitch: Brexit won't damage US creditworthiness

Ratings agency Fitch says Brexit will not harm US creditworthiness.

The rating agency said the impact is likely to be felt most in the strengthening of the dollar and tightening of credit. 

Fitch said a shock to global trade posed less of a risk to the US than other developed economies.

“The outcome of the United Kingdom's referendum on European Union membership will spill over to the US economy but will not impact US creditworthiness,” said a spokesman.

Latest on Barclays libor trial ...

BBC economics correspondent tweets

Dow Chemical to cut 4% of workforce

Dow and Dupont company names above their trading posts on floor of the New York Stock Exchange
Associated Press

Dow Chemical will cut around 2,500 jobs worldwide or 4% of its global staff. 

The move is part of a consolidation process as the company prepares for a merger with DuPont. 

As part of the tie-up Dow will close silicone manufacturing plants in North Carolina and Japan. 

Dow and DuPont plan to merge and split into three separate publicly traded companies.

Verdict in Barclays libor trial due?

BBC economics correspondent tweets

VW: settlement amount with 'scope of our provisions

Volkswagen's chief financial officer says the settlements announced with the authorities in the US are "within the scope of our provisions" and that the company is in a position to manage the consequences. 

In April VW said it had set aside $18.2bn to cover the cost of the scandal worldwide, which includes a total of 11 million vehicles. 

VW boss: lot of work to do to 'earn back trust'

VW logo

We take our commitment to make things right very seriously and believe these agreements are a significant step forward. We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead. We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.

Matthias Müller,Volkswagen chief executive officer

VW deal: Biggest ever class action-settlement against car firm

VW logo
AFP/Getty Images

As we reported earlier VW has reached proposed settlements involving nearly 475,000 if its 2 litre Volkswagen and Audi diesel vehicles with the authorities and vehicle owners and lessees in the US. The deal will cost the company $15.3bn (£11.4bn). 

It is understood to be the largest consumer class-action settlement against a car firm in US history.

In essence VW will either buy back the cars or end the lease early plus offer cash compensation.

Or it will modify the car to improve emissions and offer cash compensation. 

It has also agreed to promote zero emissions vehicle technology.

Wall Street follows Europe higher

Wall Street sign

Wall Street has followed European exchanges by opening higher today.  

The Dow Jones rose 1.09% to 17,327.06.

The Nasdaq was up 1.40% to 4,658.96.

And the S&P 500 was at 2,022.26 - a rise of 1.09%.

Investors seem to be grabbing the chance to snap up shares which have fallen dramatically because of the uncertainty surrounding the UK's vote to leave the EU.

VW US settlements in full ...

BBC US business correspondent tweets VW settlement

Osborne: 'We didn't get it all right'

Today programme tweets

If you missed the Chancellor of the Exchequer's interview with Today this morning - there's a chance to catch up with the podcast ...

View more on twitter

Norway or no way?

Financial Times US industry and energy editor tweets

Javid: 'Short-term challenges'

Nissan's factory in Sunderland
Getty Images
Nissan's factory in Sunderland

Parliamentary correspondent Sean Curran reports:

The Business Secretary, Sajid Javid, says the result of last week's EU referendum has led to some "short-term challenges" for business, but he told MPs there were also medium and long-term opportunities for business, including the car industry. 

Mr Javid said many UK businesses were reflecting on last week's decision and told the Commons, "my job is to re-assure them that this decision can be made to work. As well as looking at challenges there are plenty of opportunities."

Sterling rallies

Getty Images

Sterling is off the ropes after its nadir of $1.3122 yesterday and is up 0.8% to $1.335. Against the yen, the pound rose 1.3% to 136.54. 

Ned Rumpeltin, TD Securities' European head of currency strategy, said: "After a few days of a lot of volatility, it looks like we have found some stability. People will now need to see a bit more on the big questions such as what is the timeline for the UK withdrawal and what are the effects going to be for the global economy."

US growth revised higher

US flag
Getty Images

The US economy grew slightly faster at the start of the year than previously estimated, even though consumer spending posted the smallest gain in two years. The Commerce Department says the gross domestic product expanded at an annual rate of 1.1% in the first quarter - an improvement from the 0.8% rate released last month. 

The revision reflects stronger exports and less drag from business investment. But offsetting those gains, consumer spending growth was revised down to 1.5%. That was the weakest showing since the first quarter of 2014.   

Fashion retailers lead FTSE

Primark store on Oxford Street
Getty Images

Clothing retailers are among the big winners so far on the FTSE. 

Next and Associated British Foods - owner of Primark - have each made back some of their losses since the Brexit vote, rising 10% and 8% respectively. They are both still down though (Next by 13% and ABF 10%) since the Leave victory on Friday.

Smaller retailers are also enjoying a bounce. Supergroup, which owns Superdry is 5% higher, while online fashion retailer edged up 3%. 

Owners to be compensated

Getty Images

American owners of cars with 2-litre diesel engines can either sell their car back to VW or get it repaired. They each will also receive compensation of between $5,100 and $10,000.

The settlement also includes $2.7bn for environmental mitigation and another $2bn for research on zero-emissions technology.