Business news live: Pound and bonds recovering after Reeves gets backing, NS&I issue new Junior ISA

Hours earlier, the PM had effectively tied his fate to that of his chancellor, declaring that “we work together, we think together” and that Ms Reeves will be in place until the next general election and – optimistically – beyond.

Archie Mitchell on what’s next for the chancellor:

The UK’s services sector is growing at the fastest rate in ten months, a new report shows.

The S&P Global UK services PMI survey scored 52.8 for the month of June, up from 50.9 in May. A reading above 50 means the sector is growing; below it means it is contracting.

Some companies still highlighted economic conditions were limiting growth prospects, while the data also shows easing inflation and lowered hiring.

Donald Trump hasn’t been shy about letting the world know he wants the Fed to cut interest rates – but they’ve been standing firm.

With the next opportunity for change approaching, a continued slowdown in jobs might have increased pressure to do exactly that…but a surprise drop in unemployment has instead emerged.

Lindsay James, investment strategist at Quilter, said:

“The US economy continues to confound expectations, with the labour market adding 147,000 jobs in June, well above consensus expectations and recent averages. Furthermore, the unemployment rate fell to 4.1%, suggesting that the US economy remains in robust shape. Nervousness has begun to creep into the US jobs market and with the end of the 90-day pause in reciprocal tariffs ending next week, it was thought that the slowdown was under way.

“However, for now this seems to be far from the case. These job numbers will get far more attention than usual too because investors are watching for any sign that the labour market is beginning to weaken sufficiently to trigger an interest rate cut in July.

“Ultimately, this gives Jerome Powell and the Federal Reserve the cover it will want to hold rates at the next meeting.”

One of the first studies into the impact of Trump tariffs has been produced and The Independent has exclusively seen the data on how it’s affecting small and medium-sized businesses in the UK.

It’s not a pretty picture for importers and exporters – who are naturally not all equipped to deal with the added challenges such volatility in financial markets that these trade deal sagas have led to.

The average cost to them is expected to be around £17,000 – and two per cent of SME’s think the impact will run past £1m.

“There’s a lot of hidden activity – SME businesses are constantly dealing with change,” Jonathan Andrew, chief executive at Bibby Financial Services, told The Independent. “Firms are making constant operational changes and even small businesses are having to assess how things impact on your own business.

“Doing nothing isn’t an option – that’s the reality of tariffs which is dawning now.”

Read the full report here:

Millie Cooke, our political correspondent, has looked at the upcoming budget to predict where taxes are coming:

In the wake of the U-turn, there are now growing questions over how the government will raise the money to fill the black hole in the public finances.

Ministers have already squeezed significant savings out of their departments in cuts that were unveiled at last month’s spending review, meaning there is now a mounting expectation that the chancellor will be forced to raise taxes instead.

Now into the afternoon after a positive morning session, it’s worth a look at how all the major markets are faring following the Rachel Reeves-related fallout of yesterday.

The pound is a little lower against the dollar than mid-morning but remains up 0.06 per cent for the day: £1 is $1.3658.

Much-watched 10-year bond yields are inching their way up and down across the day but in a downtrend – the yield movement is down 1.67 per cent today, which leaves the actual yield at 4.544 per cent.

And the FTSE 100 is having a fairly decent day, up 0.47 per cent to push close to a full 1 per cent gain for this week so far.

People should be allowed to invest in private assets within their ISAs, says the Investment Asssociation boss.

It is a contentious issue and one which requires an awful lot of education around before it becomes possible, but Chris Cummings said it could have a “profound” impact on people’s wealth come retirement.

Amid concerns over liquidity in the private market, the IA chief said “that’s what a cash account is for.”

Ryanair have cancelled 170 flights due to French air traffic control strikes.

The flights are across Thursday and Friday and include destinations such as Greece, Spain and the UK.

CEO Michael O’Leary said: “Once again, European families are held to ransom by French air traffic controllers going on strike.

“It is not acceptable that overflights over French airspace en route to their destination are being cancelled/delayed as a result of yet another French ATC strike.”

Shares are down 1.2 per cent today and up 0.6 per cent across a month.

An online gambling firm has been fined £170,000 for regulatory failures including the use of unfair terms and conditions.

Taichi Tech Limited, trading as Fafabet, will also have to undergo a third-party audit to ensure it has effective anti-money laundering and safer gambling procedures, the Gambling Commission said.

An investigation found that Taichi Tech’s terms claimed that it had “the right at their own discretion to close accounts or forfeit winnings”.

The regulator concluded that the firm breached the “fair and open” licensing condition by including a discretionary term allowing the operator to close customer accounts or forfeit winnings without clear justification.

The investigation also found failures relating to anti-money laundering and social responsibility breaches.

Two-thirds of small and medium UK businesses would now vote to remain in the EU after seeing their profits harmed by Brexit, new analysis shows.

A survey of more than 500 importers and exporters found 66 per cent would choose to stay in the bloc, up from 53 per cent who voted that way during the referendum in 2016. The percentage of those who would vote to leave was 29 per cent, down from 32 per cent.

The findings, from research carried out by Critical Research, appear to be a direct response to the fact that costly rising regulations and red tape burdens have harmed the profitability of their businesses.

65 per cent of responders said the increased demands on them to comply with trade regulations have “significantly” affected their overall profits. More than half (56 per cent) said Brexit has directly made their business less-competitive within the context of the global marketplace.