Interest rates predicted to rise four times by July

Thanks for joining me. Britain’s economy grew unexpectedly in July, handing Chancellor John Healey some breathing space ahead of the Budget. The UK’s gross domestic product (GDP) expanded by 0.4pc during the month, according to the Office for National Statistics (ONS). Analysts had expected the UK economy to flatline. Officials said pubs and clubs, advertisers and alcohol makers reported an increase in turnover linked to the World Cup, while many firms also said the second hottest July on record had a positive impact. The data showed Britain’s economy may be benefitting from the massive investments in AI, with activity in telecoms expanding by 1.1pc in July, computer programming up 3.5pc and information services up 1.1pc. The data will lend support to the “optimistic story” that John Healey tried to tell about the economy in a major speech this week. Growth also accelerated from 0.3pc in June after Andy Burnham took over as Prime Minister in July. It slightly eases pressure on the Chancellor after the cost of government borrowing costs rose to levels not seen in decades after a jump in the price of oil reignited a bond market sell-off. The Treasury’s 10-year interest rate rose above 5.3pc on Thursday, a level not seen since 2007. It threatens to wipe around £10bn from Mr Healey’s fiscal headroom before his first Budget next month, according to economists at the Item Club. Here is what you need to know. 5 things to start your day 1) Badenoch must scrap triple lock, says senior Tory MP | Politician urges Conservatives to ‘slaughter some sacred cows’ to stabilise the public finances 2) | Michael O’Leary demands sacking of ‘incompetent’ air traffic control chief | Ryanair boss urges Transport Secretary to dismiss Martin Rolfe after IT meltdown grounds passengers 3) | Guardian staff threaten walkout over pay as paper hails record revenues | Journalists’ union will ballot members over strike in protest against company’s offer 4) | Hotel bosses criticise Burnham’s fresh assault on hospitality | Prime Minister gives mayors power for unlimited levy on stays in blow for pubs and families 5) | Iceland to become first British supermarket to open in Falklands | New shop will begin trading before Christmas despite rising tensions with Argentina over islands What happened overnight Oil prices remained at their highest level since May as tensions flared in the Middle East. Brent crude was above $105 a barrel after after Iran-backed Houthis seized control of Yemen’s keyport of Mocha, threatening Saudi oil exports in the Red Sea. Asian shares declined, tracking Wall Street losses. Japan’s Nikkei 225 dropped 2.8pc to 63,442.30, while South Korea’s Kospi lost 2.3pc to 6,872.39. Hong Kong’s Hang Seng dipped 0.8pc to 24,753.54. The Shanghai Composite index was down 1.8pc to 3,862.73. Australia’s S&P/ASX 200 fell 1.2pc to 8,712.20. Taiwan’s Taiex lost 1.7pc, while India’s Sensex declined 1pc. On Thursday, Wall Street’s benchmark S&P 500 dropped 0.6pc in its fourth straight loss. The Dow Jones Industrial Average lost 0.6pc, and the technology-heavy Nasdaq composite fell 0.7pc.