Time to wrap up, here are today’s main stories:

The Labour party has been drawing up options for how it could raise money through extra wealth taxes to help rebuild Britain’s public services if it wins the general election, according to sources who have spoken to the Guardian.

The proposals under consideration include increases in capital gains tax (CGT), first revealed by the Guardian two weeks ago, that could raise £8bn.

Another option under discussion could lead to significant changes to inheritance tax. The measure would make it more difficult to “gift” money and assets, such as farmland, tax free. Together with CGT increases it could raise up to £10bn in revenue, according to one document seen by the Guardian.

A senior Labour source said:

“We are starting from ground zero with our public services and infrastructure. We have to show we are serious about borrowing and raising revenue from taxes if investors are going to walk in step with us. These measures are part of unlocking wealth and putting it to work.”

Back in the economics world, output across the US private sector has hit a 26-month high this month.

The monthly ‘flash’ survey of US purchasing managers has found that US business activity growth accelerated to its fastest for 26 months in June, led by the service sector.

This has lifted the Flash US PMI composite output index up to 54.6, from May’s 54.5, which shows a faster expansion.

The survey also found that employment rose for the first time in three months, and optimism about output in the year ahead edged up to a three-month high.

Chris Williamson, chief business Eeonomist at S&P Global Market Intelligence says:

“The early PMI data signal the fastest economic expansion for over two years in June, hinting at an encouragingly robust end to the second quarter while at the same time inflation pressures have cooled.

The PMI is running at a level broadly consistent with the economy growing at an annualized rate of just under 2.5%. The upturn is broad-based, as rising demand continues to filter through the economy.

Although led by the service sector, reflecting strong domestic spending, the expansion is being supported by an ongoing recovery in manufacturing, which so far this year is enjoying its best growth spell for two years.

Newsflash: Around 1,500 Tata workers based in Port Talbot and Llanwern will begin all-out indefinite strike action next month over the company’s plans to cut 2,800 jobs and close its blast furnaces, the Unite union have announced.

Unite say the strike which begins on 8 July, is the first strike action by UK steel workers in 40 years.

They say it will “severely impact” Tata’s UK operations.

Unite general secretary Sharon Graham said:

“Tata’s workers are not just fighting for their jobs - they are fighting for the future of their communities and the future of steel in Wales.

“Our members will not standby while this immensely wealthy conglomerate tries to throw Port Talbot and Llanwern on the scrapheap so it can boost its operations abroad. They know South Wales is ideally placed to take advantage of the coming boom in green steel – if the right choices are made.

“The strikes will go on until Tata halts its disastrous plans. Unite is backing Tata’s workers to the hilt in their historic battle to save the Welsh steel industry and give it the bright future it deserves.”

Unite threatened to ramp up industrial action at the South Wales steelworks earlier this month. On Tuesday, staff began an overtime ban and “work to rule”.

The dispute centres on a deal struck in January, under which Tata will receive £500m in state subsidies to help with the move to new “greener” furnaces. The deal also involved starting to close blast furnaces from this month, triggering job losses.

Tata rejected a union proposal under which a blast furnace would have remained in operation while an electric arc furnace – which processes scrap steel - was built, saving jobs.

Without a blast furnace at Port Talbot, the UK would be the only major economy unable to make steel from scratch.

The Bank of England won’t find much cheer in today’s UK PMI report.

The slowdown in the economy could put pressure on policymakers to consider cuts to interest rates – a decision they resisted yesterday, when Bank Rate was left at 5.25%.

But the PMI report shows that inflationary pressures are building up this month, with companies lifting their prices at the fastest rate in four months.

That seems to be driven by a rise in input costs, as “severe global shipping constraints led to higher transport costs”.

The report says:

The uptick in services charge inflation was the first recorded since February, with firms generally highlighting the need to cover their costs via increased selling prices. Factory gate prices rose solidly and to the greatest extent since May 2023.

Election uncertainty also hit France’s economy this month, today’s PMI reports show.

France’s private sector economy endured a challenging month in June, S&P Global reports, with activity shrinking again in June.

The headline HCOB Flash France Composite PMI Output Index fell to 48.2 in June, from 48.9 in May, which shows a deeper contraction.

Today’s French PMI report shows:

Employment growth eased to a three-month low, while backlogs of work fell at an accelerated pace.

There was also a drop in business confidence, which reflected renewed concerns towards the outlook due to uncertainty arising from the upcoming election.

Newsflash: Britain’s service sector has been hit by a slowdown this month, as election anxiety hit the economy.

Data provider S&P Global reports that service sector growth hit a seven-month low this month, which also dragged growth across the private sector to its lowest since last November.

Service sector firms reported that the slowdown was partly driven by a pause in client spending decisions during the election period, after Rishi Sunak’s shock decision in late May to call a general election.

That suggests political uncertainty has dampened business spending this month.

In better news, manufacturers registered the sharpest rise in production levels for over two years, helped by a pick-up in new orders.

Chris Williamson, chief business economist at S&P Global Market Intelligence, says:

“Flash PMI survey data for June signal a slowing in the pace of economic growth, indicating that GDP is now growing at a sluggish quarterly rate of just over 0.1%.

The slowdown in part reflects uncertainty around the business environment in the lead up to the general election, with many firms seeing a hiatus in decision making pending clarity on various policies.

Here’s the key findings from June’s ‘flash’ survey of purchasing managers (a reading of 50 = stagnation).

• Flash UK PMI Composite Output Index at 51.7 (May: 53.0). 7-month low.

• Flash UK Services PMI Business Activity Index at 51.2 (May: 52.9). 7-month low.

• Flash UK Manufacturing Output Index at 54.2 (May: 53.4). 26-month high.

• Flash UK Manufacturing PMI at 51.4 (May: 51.2). 23-month high

This rather dampens the feel-good factor from early this morning, when retail sales jumped in May and consumer confidence rose.

In another worrying sign, inflationary pressures were back on the rise during June, as companies widely reported a steep increase in transport costs linked to global shipping bottlenecks.

And business optimism also fell this month.

The PMI report says:

The flash survey data pointed to a weaker level of business confidence regarding future output at UK companies in June, which qualitative evidence showed was fuelled by political uncertainty ahead of the general election.

Sentiment at services firms was especially affected, dropping to its lowest level for seven months.

Over in the eurozone, the economic recovery has suffered a setback this month as firms report a drop in new business.

The latest survey of eurozone purchasing managers has found that new orders decreased for the first time in four months in June, leading to slower rises in business activity and employment levels.

Worryingly, business confidence dipped to the lowest since February.

This has pulled the HCOB Flash Eurozone Composite PMI Output Index down to 50.8 points this month, a three-month low, down from May’s 52.2. Any reading over 50 shows growth.

The manufacturing sector fell into a deeper contraction this month, while service sector growth slowed.

Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, says:

“Is the recovery in the manufacturing sector ending before it began?

Both we and the market consensus anticipated that the increase in the index in May would be followed by another rise in June, potentially setting the stage for an upward trend. However, rather than moving closer to expansionary territory, the HCOB Flash Eurozone Manufacturing PMI reading fell, dashing hopes for a recovery.

This setback was compounded by the fact that new orders, which typically serve as a good indicator of near-term activity, fell at a much faster rate than in May. This rapid decline in new orders suggests that a recovery may be further off than initially expected

Newsflash: soft drinks maker Britvic has rejected two takeover approaches from Danish brewer Carlsberg.

Britvic has turned down an offer of £12.50 pence per share this week, which would value it at £3.1bn, having already rejected an initial proposal of £12 from Carlsberg earlier this month

Britvic told the City this morning:

The Board together with its advisers carefully considered the Second Proposal, and concluded that it significantly undervalues Britvic, and its current and future prospects. Accordingly, the Board unanimously rejected the Second Proposal on 17 June 2024.

Shares in Britvic have jumped by 15% this morning, to £11.69.

Carlsberg has confirmed it has made two approaches, and points out that the £12.50/share offer is a 29% premium to Britvic’s closing share price on Wednesday.

Carlsberg says it is considering its position, and says:

Carlsberg believes that the Proposal represents a compelling opportunity for Britvic shareholders to realise their investment in full in cash at an attractive valuation.

Could the jump in clothes shopping last month have anything to do with Taylor Swift’s Eras Tour, which began this month and runs until August?

Kathleen Brooks, research director at XTB, suspects Swifties have been snapping up new outfits ready for the concerts.

She writes:

UK retail sales surged last month, and core retail sales that exclude auto fuel rose at a 1.2% annualized pace in May, after falling by 2.5% in April. The ONS said that sales rebounded after a wet April, and sales volumes grew across most sectors, with clothing and furniture sales rebounding strongly.

Could this be the Taylor Swift effect, with people (including myself) splurging on new outfits ahead of her era’s tour, the UK leg of which is set to add £1 billion to the UK economy?

There is no denying that today’s retail sales report paints a positive picture for the UK consumer, Brooke adds:

Non -food store sales rose by 3.5% in May, the highest level since April 2021, and online sales surged by 5.9%, the highest monthly increase since April 2022.

The ONS did caveat the boost to sales compared to a year ago, by reminding us that last May there was an extra bank holiday for the King’s Coronation. However, after a slump at the end of spring, the consumer looks to be back as the UK finally moves towards summer.

Online clothes shopping is finally recovering, after a slump, reports Tom Youldon, partner at McKinsey & Company.

He says UK retail sales have “bounced back” in May (see intro for the details), and suggests the Euros could support spending.

With inflation down to the Bank’s 2% target, consumer confidence at the highest level since November 2021 and a 2.9% increase in retail sales volumes, consumer activity is picking up.

“In particular, online trading in apparel is finally recovering, with textile, clothing and footwear online sales rising 9.8%. Activity was likely boosted by the May bank holidays and some willingness from shoppers to splurge on discretionary goods. Although sales volumes overall still remain slightly below pre-COVID-19 levels.

“As we head into warmer months, retailers will be hopeful that falling inflation and rising wages will act as a further boost to GfK’s measure of consumer confidence. And that a combination of drier, sunnier weather, big sporting events like UEFA Euro 2024 and summer holiday purchases encourage greater spending at the tills.

England’s performance yesterday could easily have boosted demand for headache pills, for starters….

The latest public finances data shows that the UK’s net debt as a percentage of GDP remains at levels last seen in the early 1960s.

The ONS reported this morning that public sector net debt excluding public sector banks was provisionally estimated at 99.8% of gross domestic product (GDP) at the end of May.

That’s 3.7 percentage points higher than a year ago.

In historic terms, it’s a level last seen in 1961, when Harold Macmillan was prime minister and the UK was paying off the debt incurred in the second world war.

As flagged in the introduction, the UK borrowed another £15bn in May. Although that’s £800m more than a year ago, it’s £600m lower than forecast by the Office for Budget Responsibility.

British consumer sentiment has risen to a two-and-a-half year high this month, market research company GfK reports this morning.

The GfK consumer confidence survey has risen to -14 in June, up from from May’s -17, the highest reading since November 2021.

That may well have fed through to the increased retail sales spending last month.

The survey found that households have a more optimistic view of the economic situation over the last 12 months, and the outlook for the next year.

However, people grew gloomier about their own personal finances, highlighting that times are tough even though inflation has fallen back to 2%.

Joe Staton, client strategy director at GfK, explains:

Those measures on the economy registered sharp increases of seven points and six points respectively, and there was a welcome three-point boost in intentions to make major purchases.

While June’s reading of -14 is the third month in a row that confidence has increased, the headline score remains negative owing to the difficulties so many have experienced as the unrelenting cost-of-living crisis batters household budgets.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Today we will be digesting the final slug of significant economic data ahead of the UK general election, which have just been released.

The latest retail sales figures show that consumer spending picked up last month, while new borrowing statistics are casting a light on the public finances.

May’s retail sales stats show that sales volumes rebounded in May, after a slump in April when bad weather drove shoppers from the high street. That’s rather stronger than the 1.5% rise forecast by City economists.

Retail sales volumes jumped by 2.9% in May 2024, following a fall of 1.8% in April, the Office for National Statistics reports.

The ONS says:

Sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding following poor weather in April.

Last month was the warmest May on record, in a series going back to 1884, according to the Met Office.

More broadly, sales volumes rose by 1.0% in the three months to May 2024 when compared with the previous three months, the ONS adds.

Retail sales volumes rose across all main sectors, the ONS says.

The biggest growth was seen among “non-store retailers”, such as online shops, where volumes jumped by 5.9% on the month.

At department stores, clothing outlets, household goods sellers, and other non-food stores, volumes rose by 3.5% in May.

These increases suggest people feel more confident about economic conditions – as shown by the latest poll of consumer confidence from GfK. But while that may bolster Rishi Sunak’s claim that the economy is turning the corner, this isn’t providing the PM with a poll boost….

The public finances, meanwhile, show that the UK borrowed £15bn in May to cover the difference between governent spending and income. That’s a little lower than forecast, but £800m more than in May 2023.

It’s the third highest May borrowing since monthly records began in 1993.

The agenda

• 7am BST: UK public finances for May

• 7am BST: UK retail sales for May

• 9am BST: Eurozone flash PMI survey for June

• 9.30am BST: Eurozone flash PMI survey for June

• 2.45pm BST: US flash PMI survey for June

• 3pm BST: US existing home sales for May