And finally..... our Money editor Patrick Collinson explains how Sir Richard Branson could make a large profit, if CYBG succeed in taking over Virgin Money:

Virgin Money traces its origins back to the 1995 launch of Virgin Direct, an investment business, but it was the takeover of Northern Rock in 2011 that propelled it into a large-scale operation.

As chancellor, George Osborne nearly four years after nationalising the bank at the height of the financial crisis. The price paid by a consortium of investors, led by Branson, was the UK taxpayer had injected into bank. Osborne said at the time that the deal represented value for money for UK taxpayers.

Branson’s consortium included the US billionaire, Wilbur Ross, now Donald Trump’s commerce secretary. It bought the “good” half of the bank, including its branch network, funded by retail deposits. The “bad” part of Northern Rock – which included its fabled 125% mortgages – remained in public hands, although defaults and losses have been much lower than anticipated.

That’s all for today. My colleagues in the US will be covering Donald Trump’s decision on Iran here:

Despite Shire’s best efforts, the FTSE 100 has ended the day down 1 point at 7565, a most underwhelming result.

Here’s our news stories on the main business events of the day so far:

Nick Field, Director at corporate finance adviser Livingstone, reckons that merging Virgin Money into Yorkshire Bank and Clydesdale would make sense:

‘Creating a ‘challenger’ bank of real scale with total assets in excess of £80 billion clearly has attractions. As both parties have relatively strong retail deposit franchises, the realisation of synergies on the asset side of the balance sheet and in operational costs will be key to drive value for shareholders in the merged group.’

‘The Virgin Money team have a great track record of execution having turned a legacy mortgage portfolio into a strong, growing consumer brand covering a range of financial products. The value of that strong brand and management is tangibly expressed by the price reaction to the offer, with Virgin Money enjoying a considerable premium whilst CYBG has slightly declined.’

Wall Street has opened cautiously, with the main indices dipping ahead of president Trump’s announcement tonight....

The oil price is likely to move sharply at 7pm UK time, when Donald Trump reveals his decision on Iran.

Ole Hansen, Saxo Bank’s Head of Commodity Strategy, says:

There are multiple options available to President Trump which makes this such a binary event where the price could move sharply in either direction. The three most likely options currently being mentioned are:

1) Waiver the sanctions again while allowing time to renegotiate the deal

2) A soft exit being the refusal to waive sanctions on Iran’s oil export. It would give companies 180 days to wind down their deals before sanctions are implemented. Furthermore it would provide the US and Europe more time to find a common ground.

3) A hard exit which could see Trump remove the waiver with immediate effect

The financial markets are becalmed today, with very little action to report.

In London, the FTSE 100 is up a mere 9 points at 7576 this lunchtime, as City traders abandon their terminals to sunbath.

The oil price is down a little, with Brent crude off 0.6% at $75.66 per barrel. Yesterday it reached its highest level since 2014, ahead of Donald Trump’s decision on whether to allow sanctions on Iran.

This would be the first step towards ending the nuclear deal agreed by Barack Obama’s administration (in which sanctions were lifted, in return for Iran halting its nuclear weapons programme).

Analysts fear that ending the deal could spark new tensions in the Middle East, and also destabilise the Iranian economy.

Trump, though, has long argued it’s a bad deal, and may now act.....

If Takeda can win shareholder support, then it will acquire Shire for 64.4% more than its value back in March.

Such a whopping premium shows that the Japanese firm is desperate for Shire’s pipeline of rare drugs, and its established sales in America.

Associated Press explains:

Shire gives Takeda a larger presence in the U.S. and expertise in rare diseases, an increasingly important area for pharmaceutical companies as patents on established drugs expire.

Even though Shire’s headquarters are in Dublin, it earns more than two thirds of its revenue in the U.S. on drugs like Adderall, which is used for ADHD.

Takeda, meanwhile, has like many Japanese companies been expanding overseas to compensate for slowing growth at home. Last year it bought Ariad Pharmaceuticals of Cambridge, Massachusetts. Takeda is valued at about $34 billion and makes almost half of its sales in Asia, and about a third in the U.S. Among its top sellers are Entyvio, used to treat ulcerative colitis, and cancer drug Leuprorelin.

In other banking news, Royal Bank of Scotland is refusing to abandon plans to close 50 branches in Scoland.

C EO Ross McEwan told MPs on the Scottish Affairs Committee that the decision was the “best way of going forward”, despite public anger over the plan.

“I do recognise that customers are very disappointed that their local branch is closing”.

“What we’ve done here with a package of different ways of operating with this bank is, I think, the best way of going forward, that we can keep those services to our customers as well as moving away from physical distribution when it’s just not being used.”

That’s not going to please RBS customers who find that their nearest branch has closed. In theory, new technology means less need for banks to maintain a physical presence on the high street; in practice, TSB’s tech meltdown has shown the problems with that approach.

Back in the City, Shire’s share price has dipped below the £40 mark.

At £39.90 (up 3.5% today), it’s further away from the £48 per share which Takeda has agreed to pay.

That underlines the fact that shareholders may not back Takeda’s offer, even though Shire’s board have accepted it. The Japanese firm will hope to change the City’s mind in the months ahead, and points out that the deal isn’t meant to complete until next year.

But Takeda certainly has work to do to pull off the biggest pharmaceuticals deal since 2000, as David Madden of CMC Markets explains:

Shares in Shire have been given a nice boost in recent weeks after Takeda made two unsuccessful bids for the company.

On the other side of the coin, Takeda’s share price has dropped over 30% since the January high, and given the negative market reaction to their pursuit of Shire, there may be some investors who are sceptical about the offer.

Another 35 workers have lost their jobs following the collapse of construction and outsourcing group Carillion.

The Official Receiver, which took control of Carillion after its liquidation in January, announced the bad news this morning. It means that almost 2,300 of the company’s 20,000 workers have been laid off, while 11,489 have been saved.

The news comes as MPs hold an investigation into the lessons that can be learned from Carillion.

Phil Bentley, the CEO of outsourcing group Mitie, told the Public Accounts Committee it was “very sad” to see more than two thousand people losing their jobs.

He argued that Carillion was brought down by problems at its construction arm - where cost overruns at several contracts created a “perfect storm”, claiming:

It’s not a failure of the outsourcing model.

Bentley also pointed to Carillion’s used of ‘off balance sheet’ instruments, which made it harder to tell the strength (or weakness) of its balance sheet.

Rupert Soames, CEO of outsourcer Serco, argued that the government should get some credit for its handling of the crisis.

Because ministers did their homework early, they were ready for the moment that Carillion “tried to put a gun to their head” and demanded support, explained Soames. The government didn’t cave in, as it knew what would happen if Carillion went into receivership.

I don’t know about a single hospital floor that been left uncleaned or a school meal that’s not been delivered, because the government did its contingency planning.

Soames defended the outsourcing model used in Britain today, saying there is close scrutiny of the private sector companies who help to run public services.

But other experts are more critical of outsourcers.

The Guardian’s David Walker, for example, told the committee that the cost savings have tailed off, the innovation promised by outsourcing firms hasn’t been delivered, and the promised transfer of risk from public to private sector hasn’t happened either.

With the UK housing market looking weak, there’s every reason for the Bank of England to resist raising interest rates at its monetary policy meeting on Thursday.

A few weeks ago, the BoE was widely expected to hike borrowing costs this month -- having dropped heavy hints that a rise was coming.

However, investors have rapidly changed their minds, following a flurry of disappointing economic data of late.

Sajiv Vaid, portfolio manager at Fidelity MoneyBuilder Income Fund, says the Bank of England is now in a fix.

If it raises Bank rate, it could panic the City. If it doesn’t, then governor Mark Carney will face fresh criticism for having hinted that rates were going up soon.

As Vaid puts it:

So, having raised expectations (not for the first time either!), the BoE now find themselves in an unenviable dilemma of “damned if they do and damned if they don’t...”, a horrible predicament for any central bank to find themselves in. The situation in the UK precisely highlights the difficulty global central banks face with signalling rate hikes in the post-GFC era. Remember, it took twelve months before the US implemented its second rate hike in December 2016.

Patience is key for the BoE at this stage and I’d argue there are lessons to be learned from the US, where the Fed, despite the long pause, has subsequently raised interest rates a further four times with their credibility remaining intact. We think a pause from the BoE is appropriate, given the domestic backdrop and signs that the frothiness in global GDP may well have stalled, which should provide a supportive backdrop for UK fixed income assets.

Here’s Bloomberg’s take on the UK hosing market:

Britain’s housing market has been cooling for the past two years, with London seeing the sharpest slowdown. Monthly mortgage approvals have slipped and reports point to waning interest from potential buyers.

“Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down,” said Russell Galley at Halifax.

If Virgin Money does fall to CYBG’s takeover bid, it will lower the number of smaller banks trying to shake up British finance.

Sir Richard Branson created Virgin Money more than two decades ago. In 2011, the bank strengthened its position by buying the ‘good’ portion of Northern Rock for £747m.

Such challenger banks have had a bad press recently, with TSB bungling its move to a new IT platform.

As the FT’s Matthew Vincent puts it:

If the deal goes through, it would mean Virgin Money’s challenge to the UK high street banks comes to an end after just six years - having bought the old Northern Rock business after it was bailed out by the government during the financial crisis.

But, merging Virgin with Clydesdale and Yorkshire Bank could create a more powerful competitor, he adds....

CYBG would certainly gain scale from Virgin’s presence in the mortgage market and expand into credit cards. Virgin Money would gain access to current accounts and small business lending, which it has struggled to develop on its own organically

City analyst Mike van Dulken of Accendo Markets has also spotted the gap between Shire’s share price and the Takeda offer...

Shire’s chief executive, Flemming Ornskov, says Takeda’s £46bn deal is in the best interests of shareholders.

Ornskov also claims it could help create better drugs for patients too.

“I would like to thank the entire Shire team for all that we have accomplished over the last five years to transform Shire into the leading rare disease biotech company and a tenacious champion for patients in need.

“I am confident that this relentless focus will enable us to continue delivering against our priorities throughout this process.

“With a truly innovative portfolio and pipeline, I believe that the combination of the two companies is in the best interests of shareholders and offers an opportunity to improve the lives of even more patients globally with rare and highly specialised conditions.”