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Summary

  1. FTSE 100 and FTSE 250 both end the day up by more than 1%
  2. Osborne signals abandonment of Budget surplus target
  3. UK government bond yields tumble
  4. Shell boss in North Sea rethink

Live Reporting

By Karen Hoggan

All times stated are UK

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Theresa May, Andrea Leadsom

Theresa May and Andrea Leadsom are in the final round of the contest to become Conservative Party leader and prime minister. How will it unfold?

Read more

Good night

That's all from the Business Live page after a tumultuous week. Join us again from 06:00 for more business news.

Why are voters rejecting economic efficiency?

Here's a very thoughtful and interesting discussion in the New York Times by senior economics correspondent Neil Irwin.

He looks into why large swathes of voters in the US and UK appear to be rejecting the underlying logic of a globalised economy.

Wall Street inches higher

The major US stock indexes clung to modest increases on Friday, helped by encouraging US manufacturing data.

The indexes have erased almost all their losses stemming from the Brexit vote.

 "Clearly, people have assessed that either, one, it's not a big deal, or, two, it's not going to happen at all, and they're positioning according to those views," said Walter Todd, chief investment officer at Greenwood Capital.

The Dow Jones industrial average finished up 17.33 points, or 0.10%, at 17,947.32, the S&P 500 had gained 4.01 points, or 0.19%, up to 2,102.92, and the Nasdaq Composite added 19.90 points, or 0.41%, to finish at 4,862.57. 

IFS: Austerity will now go through 2020s

Director of Institute of Fiscal Studies says austerity will now continue through 2020s.

'Don't count on room for manoeuvre in Brexit negotiations'

What's Osborne's plan now?

BBC Scotland business and economy editor tweets...

How important is foreign investment?

Chart showing UK current account deficit
BBC

Why is foreign investment so important to the future of the UK economy?

Rate board in a Bureau de Change

How important is foreign investment?

Why is foreign investment so important to the future of the UK economy?

Read more

A third of voters not convinced UK will leave the EU

BBC Newsnight editor tweets...

Wake Up to Money sports edition on Sunday

BBC business presenter tweets...

Recording the first ever WUTM Sports Edition...launching on @bbc5live on Sunday...

Recording the first ever WUTM Sports Edition...launching on @bbc5live on Sunday...

CMA puts pressure on car hire websites

The Competition and Markets Authority has written to car hire websites to ask them to make some information more easy to access for consumers.

Fuel charges, young driver surcharges, excesses and collision damage waiver exclusions are all pieces of information that need to be made more apparent, the CMA said.

Central banks' alphabet soup

Luke Hickmore, senior investment manager at Aberdeen Asset Management, points the finger at central banks for what he calls a "veritable alphabet soup of extraordinary policies" over the past 20 years.

They have perhaps done more than anything else to turbo charge the income disparity between rich and poor which has been steadily growing for years. The sense of unfairness and injustice that income disparity established is part of what has created this great debunking of the establishment in the UK. It’s a similar story in other European countries and could be in the US come November. The result for the economies of these countries is that they very much will play second fiddle to the politics in the years to come. Whether that is a good thing or not depends on your perspective. Some will say that it is a welcome end to untrammelled capitalism. Others will question whether it’s prudent for political whim to define so much about our economic future. Expect more volatility: the market is very bad at pricing political change."

Chancellor 'right to abandon fiscal rule'

Andrew Tyrie
PA

Yet more reaction to Chancellor George Osborne's announcement that he's abandoning his budget surplus target - this time from the chairman of the Treasury Committee, Andrew Tyrie. 

The Chancellor was right to abandon the fiscal rule. It’s the latest in a long line of fiscal rules, targets and objectives of successive governments to have bitten the dust. Any rule which required the Chancellor to adjust public spending or taxation twice a year to take account of small changes in the OBR’s forecasts was always likely to be vulnerable. To be credible it needed to be put in a longer term framework.

Andrew Tyrie MPChairman of the Treasury Committee

Brexit expected to have 'negligible' impact on US firms

Most US companies expect to experience only a "negligible impact" as a result of last week's Brexit vote, according to a new report. 

The Institute for Supply Management said 61% of the firms it polled saw a negligible impact compared to 6% who expect a "negative impact" for the remainder of the year. 

There was little difference between non-manufacturing and manufacturing firms. 

Of those who forecast a negative impact, they mostly believed it would be a result of changes in foreign exchange rates following on from 'Brexit' vote. 

The survey found that," while most procurement executives do not foresee major disruptions, many are cautiously watching the situation closely and believe Brexit will hamper growth".  

Dutch PM 'flexible' on financial sector bonuses

Mark Rutte,
Getty Images

Dutch Prime Minister Mark Rutte said on Friday that a strict 20% cap imposed last year on bonuses in the financial sector has "some flexibility" for foreigners, reports Reuters.  

The comment was made in response to questions about what the Netherlands can do to attract businesses following the Brexit vote.  

The Netherlands is considered by some as a possible alternative to London because of its advanced infrastructure, strategic location, good schools and high level of English proficiency. It has Europe's largest port and fourth largest airport. 

The UK's vote to leave the EU has prompted companies in London to reconsider where they are headquartered, due to the possibility that their access to the European single market might be restricted once the vote is implemented. 

FTSE closes higher again

London Stock Exchange sign
AFP

Both the FTSE 100 and the FTSE 250 - which includes more UK-focused businesses have hung onto their gains today. 

Shares were given a boost yesterday by Bank of England Governor Mark Carney's hints that interest rates could be cut over the next couple of months.  

Precious metals mining companies were among the biggest gainers as investors looked for a safe haven.

Fresnillo rose by 7% and Johnson Matthey by 5.57%.

The FTSE 100 ended the day at 6,577.83 - that's a rise of 1.13%.

The FTSE 250 closed up 1.19% at 16,465.49.

Meanwhile Sterling - which fell after Mr Carney's comments - is still trading a shade lower against the dollar. 

EU passports in demand?

Business Daily presenter tweets

Appy ever after?

BBC Technology of business reporter tweets

Wall Street follows London higher

Wall Street sign
Getty Images

Wall Street opened higher for the fourth day in a row buoyed by the prospect of central banks around the world acting to boost their economies. 

The recovery - which comes after two days of sharp falls in the wake of last week's Brexit vote - was helped yesterday by Bank of England Governor Mark Carney's comments raising the possibility of interest rate cuts over the next couple of months. 

"I think we are going to have a slow drift up," said Brad McMillan, chief investment officer of Commonwealth Financial Network in Massachusetts.

"Everybody is at the beach already and I don't expect a lot of action, in the absence of some kind of market-moving information."

 A short while ago the Dow Jones was at 18,001.76 - a rise of 0.40%.

The Nasdaq was up 0.73% at 4,878.08.

And the S&P 500 stood at 2,108.07 - that's up 0.44%.

Coming up on Tech Tent on BBC World Service ...

BBC technology correspondent tweets ...

Chemical industry lobbies leadership candidates

Letter from Chemical Industries Association
Chemical Industries Association

The contenders for the leadership of the Conservative Party - see previous post - can expect to find themselves the target of much lobbying in the coming weeks.

Straight out of the blocks comes the Chemical Industries Association which has sent an open letter to the candidates pointing out that the industry contributes £200bn every year - or £3.8bn a week - to the UK economy and employs 150,000 people. 

It says it's the UK's biggest manufacturing export earner - and expects to be able to increase its contribution to £300bn a year by 2030. 

So what does the association - which represents chemical and pharmaceutical companies both large and small - want the prospective leaders to do in order for it to be able to achieve that? 

The letter spells it out: "Every successful economy has a strong manufacturing base, with a chemical sector at its heart," it says.

"In leaving the European Union we would stress three key priorities that must be secured to ensure that success – access to the single market; the availability of skilled people and the supply of competitive and secure energy." 

We'll keep you posted when other sectors come forward with their priorities ...

Labour: Surplus target not flexible in face of shocks

John McDonnell
Getty Images

More reaction to the news that the Chancellor George Osborne has abandoned his target of restoring government finances to a surplus by 2020 - this time from the Shadow Chancellor, John McDonnell.

The truth is as Labour consistently warned, George Osborne’s recovery built on sand was underpinned by a fiscal rule that is not robust or flexible enough to equip our economy for any potential shocks it may face. We now need the Chancellor to inform us what evidence he has had passed to him from the OBR, as working families need to be reassured and a plan put in place. He should now lay out a programme of government investment and support for businesses, bringing forward shovel-ready projects particularly in those areas hardest hit by long-term economic decline.

John McDonnell MPLabour Shadow Chancellor
Cecilia Malmstrom

UK and EU politicians send conflicting signals about how the UK's Brexit negotiations should proceed.

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Budding Rose

The fishing industry wants out of the EU in the face of Scottish government efforts to keep the country in, ministers are being told.

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IFS: Austerity will now go through 2020s

The World at One

BBC Radio 4

Chancellor George Osborne has abandoned targets to restore government finances to a surplus by 2020.It had been the chancellor's most prized goal and had been driving austerity measures in previous budgets.It is thought that the government will raise borrowing, so it can avoid further cuts in spending or raising taxes.Paul Johnson, director of the Institute of Fiscal Studies, told Mark Mardell that this was "not the end of austerity."  

FTSE 100's Brexit winners and losers

Stockbrokers Hargreaves Lansdown have put together a useful league table of the winners and losers on London's blue-chip index in the wake of the Brexit vote:

Best performing:

  1. Fresnillo 32.7%
  2. Randgold Resources 30.3%
  3. Mediclinic International 15.0%
  4. Shire 14.6%
  5. AstraZeneca 14.6%
  6. Diageo 13.8%
  7. British American Tobacco 13.3%
  8. BP 13.2%
  9. Unilever 12.3%
  10. GlaxoSmithKline 12.3%

Worst performing:

  1. Royal Bank of Scotland Group -31.5%  
  2. Taylor Wimpey -31.2%  
  3. Persimmon -31.0%  
  4. International Consolidated Airlines Group -29.9%  
  5. Barratt Developments -29.8%  
  6. Easyjet -29.2%  
  7. Barclays -25.9%  
  8. Dixons Carphone -25.1%  
  9. Lloyds Banking Group -25.1%  
  10. Berkeley Group Holdings -23.2%  

The list gives the share price change from the closing price on Thursday 23 June to close on Thursday 30 June.

Dairy Crest leads FTSE 250 higher

Dairy cows in field
Dairy Crest

The FTSE 250, which as regular readers of the Live Page will know is a better barometer of UK businesses than the FTSE 100, is back in positive territory today.

It was 16,343 points a short while ago - up 70 points.

Cheese maker Dairy Crest is among the big winners, rising 6.6% after it was upgraded by analysts. Shares in budget airline Wizz Air increased 6% as it continued to claw back Brexit losses.

At the bottom of the mid-cap FTSE 250 is Stagecoach, following a downgrade by analysts at JP Morgan. The transport group's shares were down nearly 10% a short while ago.

Moody's cuts Bank of England outlook

Bank of England
Getty Images

Moody's - one of the big three credit ratings agencies - has downgraded its outlook on the rating for the Bank of England from stable to negative in the wake of the Brexit vote. 

"The UK's decision to leave the European Union has credit implications for many of the country's debt issuers because the prolonged period of uncertainty facing the country will weigh on economic growth and increase financial market volatility," it says. "The outlook changes reflect the entities' close economic, financial and institutional linkages with the UK sovereign."

Moody's has also lowered the rating outlooks on 52 UK "sub-sovereign entities" - including local authorities, Transport for London and housing authorities - from stable to negative.     

More detail here.

Osborne's surplus chances 'only ever 50:50'

George Osborne at Manchester Chamber of Commerce
Getty Images

George Osborne only had "a slightly better than 50:50 chance" of making the target even before the EU referendum vote, according to Carl Emmerson, deputy director of the Institute for Fiscal Studies.

The Chancellor first committed himself to returning the national finances to surplus by the end of the decade at the Conservative Party conference in 2013 and it became policy in the July budget of 2015.

But there have been questions ever since over whether that target could be met.

Slap for savers

Kevin Peachey

Online personal finance reporter

Cash
Getty Images

First we had Mark Carney’s hint that interest rates could be cut in the summer, now we have the chancellor ditching a plan for a 2020 budget surplus.

For your personal finances this is likely to cut the cost of borrowing, lead to even worse returns for savers, add to the value of pension pots, and reduce the likelihood of additional tax rises or cuts to spending (such as benefits or public sector pay).

Read more here.

Brexit and the easing of austerity

Kamal Ahmed

Economics editor

It is sometimes easy in these incredible political times to forget that for most people "it's the economy, stupid" still holds true.

For the UK economy, one of the most important passages of Theresa May's speech yesterday was when she signalled that George Osborne's "fiscal rule" (to produce a budget surplus by 2020) was for the Treasury shredding machine.

Now the Chancellor has said he agrees, arguing that the government must be "realistic" about its fiscal targets and that austerity policies could be eased.

My Treasury sources point out that the "rule" can be varied in "non-normal" times.

And these are pretty "non-normal" times.

Read the rest of Kamal Ahmed's blog here.

Brexit boost for FT

Financial Times
FT

Who said Brexit was all bad news? Politico's Alex Spence reports that sales of the Financial Times print edition were 600% higher last weekend as readers sought news and analysis about the vote to leave the European Union.

Online traffic also hit new records for the FT, with the Brexit poll tracker the most popular piece of journalism it has published - attracting almost 4 million page views.  

The FT now has 800,000 paying users - three quarters of whom are digital subscribers. 

Easyjet in EU licence talks

Easyjet plane
AFP/Getty Images

Still on the subject of aviation, easyJet says it has started the process of acquiring an air operator certificate (AOC). An AOC would be issued by another EU country to give the airline continued access to Europe's single aviation market.

Reports suggested the AOC application was the first step towards possibly moving Easyjet's legal headquarters outside the UK. 

However, the airline stressed that it had no plans to move its main headquarters from Luton - "our home for 20 years".

After several days of pretty steep falls, easyJet shares are up almost 1% at £10.96. The stock has slipped 37% this year.

Black boxes take to the cloud

A330 plane
Getty Images

Searches for aircraft black boxes following crashes could become a thing of the past thanks to the new SwiftBroadband-Safety (SB-S) service from satellite communications firm Inmarsat.  

The service, which will be available on the Airbus A320 and A330 single aisle aircraft ranges, offers much faster communications between pilots, air traffic controllers and airlines and gives airlines new services such as the ability to continually track flights and stream data. The "black box in the Cloud" idea means that the data stored on a device in the plane will be instantly sent to a server. 

Eighty per cent of the world's commercial airliners are single aisle models.

Inmarsat is listed on the FTSE 100 and its shares have fallen almost 30% this year.

Osborne's Budget surplus comments

Here's the key section from George Osborne's comments at the Greater Manchester Chamber of Commerce... 

"Now, as the governor of the Bank of England said yesterday, the referendum result is as expected likely to lead to a significant negative shock for the British economy. How we respond will determine the impact on people’s jobs and on economic growth. The Bank of England can support demand. 

"The government must provide fiscal credibility, so we will continue to be tough on the deficit but we must be realistic about achieving a surplus by the end of this decade. This is precisely the flexibility that our rules provide for. 

"And we need to reduce uncertainty by moving as quickly as possible to a new relationship with Europe and being super competitive, open for business and free trading. That's the plan and we must set to it."

UK must be 'realistic' about 2020 Budget surplus

Chancellor George Osborne
AP

Chancellor George Osborne has abandoned his target of restoring government finances to a surplus by 2020, the BBC has learned.

It had been the chancellor's most prized goal and had been driving austerity measures in previous budgets.

However, the Chancellor said the UK must be "realistic about achieving a surplus by the end of the decade".

Read more of this breaking story here.

Gold miners sustain FTSE gains

Randgold gold mine in Democratic Republic of Congo
Reuters

The FTSE 100 is bumping along at around 6,525 points - 0.3% higher on the day.

Shares in gold and silver miner Fresnillo are leading the way with an increase of 4%, followed by Randgold Resources (whose goldmine is pictured) on 3% gains. 

However, financial stocks RBS and Old Mutual are dragging on the blue-chip index, falling 3% and 2% respectively.

Bernard Aw, a market strategist at IG, said the week hasn't "ended with tears", with the FTSE 100 having now recovered all its Brexit losses.

Love bomb

As Justice Secretary Michael Gove sets out his case to become Tory leader, BBC business producer Mark Broad tweets...

View more on twitter

It comes after Boris Johnson - at that point the frontrunner for the leadership - said on Monday that "most sensible people" could see the Bank of England governor had done a "superb job".

Mr Carney clashed with some in the Leave camp who accused him of compromising the Bank's political impartiality during the referendum campaign.