Time to recap…

A fire at an electrical substation which led to the closure of Heathrow Airport last week is no longer being treated as a “potentially criminal matter”.

The Metropolitan Police said:

Following enquiries to date, officers have found no evidence to suggest that the incident was suspicious in nature.

As such, we are no longer treating this as a potentially criminal matter, although we continue to support other partners, including colleagues from National Grid, London Fire Brigade and SSEN, with whom we remain in close contact.

The UK government has approved a £9bn road tunnel between Kent and Essex called the Lower Thames Crossing, ending years of delay.

The move has been welcomed by business groups, who say it will improve connectivity, but criticised by opponents who say it will increase carbon emissions and not lower congestion.

British retailers have reported the sharpest drop in sales volumes in eight months in March, in a sign that consumers are cutting back.

Tesla’s car sales in Europe have fallen by over 40% so far this year.

Shell has been criticised after its CEO’s pay jumped to £8.6m last year.

Elsewhere in London, police have just announced that the fire which caused Heathrow Airport to close last Friday was no longer being treated as a potentially criminal matter.

The Metropolitan Police’s Counter Terrorism Command had been leading the investigation to establish the cause of the blaze, at the electricity sub-station in Hayes.

This afternoon, the Met say:

Following enquiries to date, officers have found no evidence to suggest that the incident was suspicious in nature. As such, we are no longer treating this as a potentially criminal matter, although we continue to support other partners, including colleagues from National Grid, London Fire Brigade and SSEN, with whom we remain in close contact.

Should any relevant new information or evidence come to light it will be looked at and considered as appropriate.

The government and Heathrow have both commissioned reviews into what happened, amid the fall-out from the fire.

The head of National Grid has claimed that there was enough power for Heathrow to remain open during the entire period it was shut down on Friday, with electricity provided by two other substations.

Heathrow, though, insists it could not operate uninterrupted, as hundreds of critical systems across the airport needed to be safely powered down and rebooted.

Airlines, meanwhile, are considering legal action over the disruption.

Here’s a map showing the 14.5 mile long route of the Lower Thames Crossing, which will connect the A2 and M2 in Kent to the A13 and M25 in Essex, and include the UK’s longest road tunnel, when built.

Sir John Armitt, Chair of the National Infrastructure Commission, agrees that UK businesses will benefit from the Lower Thames Crossing:

Armitt says:

“Improving connectivity is vital to the government’s mission of sustainable, long term economic growth. This green light for the Lower Thames Crossing is excellent news and will be welcomed not only by local drivers and communities but also by businesses across the country which depend upon reliable access to Europe, but are often frustrated by delays at the Dartford Tunnel.

“Given the scale of investment needed in the country’s strategic infrastructure over coming decades, I hope this is the first of many future strategic planning decisions which are crucial to transform the transport, energy and water networks on which the country relies.”

Local campaigners Thames Crossing Action Group have also opposed the scheme, arguing that construction would cause “eight years of disruption and gridlock on local roads”, while predicting that the new road would “increase traffic, pollution, carbon and noise”.

Chris Todd, director of campaign group Transport Action Network, has criticised the decision to approve the tunnel:

“This is absolute madness.

“It’s a desperate decision to distract from the likely bad news in the Chancellor’s spring statement tomorrow.

“Rather than boosting growth, this will clog up roads in the South East and slow the economy down even more.”

David Wells, chief executive of industry body Logistics UK, has welcomed the approval today of the Lower Thames Crossing project.

Wells says the announcement to approve the £9bn tunnel, which will be Britain’s biggest single planned road building project, is “excellent news” for businesses across the country, who are “currently hamstrung by delays crossing the Thames”.

He added:

“Industry is united in its backing for this vital trade route.”

Supporters of the plan have argued that the new tunnel, which will pass under the River Thames near Thurrock, is vital to take the strain off the congested and unreliable Dartford Crossing. It currently handles the bulk of traffic east of London including freight from the Channel ports.

Uh-oh.

The US economy will enter a recession in the second half of 2025, according to a majority of chief financial officers responding to the quarterly CNBC CFO Council Survey.

The poll of chief financial officers across US companies found that CFO’s are generally “pessimistic” on the overall state of the U.S. economy and uncertain about the stock market.

95% of CFOs said policy is impacting their ability to make business decisions, and many said while Trump is delivering on promises, his administration’s approach is too chaotic, disruptive and extreme for businesses to navigate effectively.

More here.

Donald Trump is continuing to use the presidency in new ways, it seems.

The latest financial wheeze is for Trump Media & Technology Group Corp to launch ETFs – exchange traded funds, or baskets of assets such as equities bundled together.

The plan is to work with Crypto.com to offer “Made in America” ETFs.

Trump Media, which operates the president’s Truth Social social media site, says the ETFs, which will be made available through Crypto.com’s broker-dealer Foris Capital LLC, and include digital assets and securities with a “Made in America” focus spanning diverse industries such as energy.

Those digital assets could includes Bitcoin, Cronos, and other crypto assets. The ETFs will launch later this year, according to Trump Media.

The UK is on track to be the first country in Europe to allow people to use their smartphone to make calls using signals direct from satellites.

Ofcom, the communications regulator, said that satellite technology has reached a point that signals can be reliably beamed from space to allow access to phone and web services when there is no coverage from mobile phone masts.

“For years, we’ve seen satellite calls in disaster movies on special handsets,” said David Willis, spectrum group director at Ofcom. “We’re now on the cusp of people being able to make them on their everyday smartphones”.

The regulator said that amending the licences held by mobile phone operators to authorise so-called “direct-to-device” satellite technology could mean that even the most rural and isolated communities could have guaranteed mobile coverage.

In January, Vodafone successfully made the world’s first satellite video call using a standard mobile phone, in a mountainous region of Wales, after Ofcom issued an innovation and trial licence.

Willis says:

“Ofcom strives to be at the forefront of technological change. And we are the first country in Europe to press ahead with the next frontier in mobile connectivity.”

Ofcom has opened a consultation on its proposals and said that it could potentially begin authorising direct-to-device services later this year.

The transport secretary has given formal approval to the £9bn Lower Thames Crossing, a road tunnel joining Essex and Kent.

Heidi Alexander granted a development consent order on Tuesday morning, after the decision had been pushed back again last year by the new government.

The controversial scheme has for years been Britain’s biggest single planned road building project, and delays, consultations and redesigns have already cost about £1bn.

The Lower Thames Crossing project will comprise more than 14 miles of roads including the tunnel, which will pass under the River Thames near Thurrock.

UK retail sales have dropped again this month, as weak consumer confidence hits spending in the shops, a new poll has found.

The CBI’s latest ‘distributive trades’ survey shows the UK economy remains in a weak state, a day before Rachel Reeves’s spring statement.

The survey found that British retailers have reported the sharpest drop in sales volumes in eight months. Retail sales volumes dropped year-on-year in the year to March, the sixth month of decline in a row.

This chimes with a survey from KPMG this morning, showing that consumers are cutting back spending on everyday items.

Martin Sartorius, principal economist at the CBI, says:

“Annual retail sales volumes fell markedly in March and are expected to continue declining next month. Firms across the retail and wholesale sectors reported that global trade tensions and the Autumn Budget are weighing on consumer and business confidence, which is leading to reduced demand.

“Tomorrow’s Spring Statement is likely to focus on the persistent challenges facing the UK economy, reinforcing the need for policies that boost businesses’ confidence to invest.

“Reforming business rates, supporting the British Business Bank’s Growth Guarantee Scheme, and properly resourcing the Growth and Skills Levy could support businesses’ investment plans and drive the government’s growth ambitions.”

The survey measures the proportion of retailers who reported an increase, or a decrease, in sales.

Retailers reported that sales volumes fell at an accelerated rate in the year to March, and are expected to fall at a slower pace next month.

Sales for the time of year were judged to be below seasonal norms in March, as they were in February. Sales are expected to disappoint again in April.

The head of the UK’s financial services watchdog has suggested that UK lenders could relax their mortage ‘stress tests’, to help people who are renting to buy their own home.

Testifying to the Treasury Select Committee this morning, Nikhil Rathi, chief executive of the Financial Conduct Authority, said some lenders could be being too cautious, meaning that people who can afford mortgage payments can’t actually get a deal.

Asked what changes could be made to the regulation of mortgage lending to lift home ownership, Rathi urged lenders to show flexibility, saying;

Already lenders can exercise judgment as to how they do the stress test, and we think that some may be being too cautious at the moment in the level of interest rate they’re stressing against.

Rathi added that the FCA is calling for evidence from lenders and consumer groups as to how we may be able to adjust the stress test.

So let me give you an example. We know that rents are very high in many parts of the country, and people may be demonstrably able to pay those high rents, and they manage to sustain their finances in doing so, and yet, if their monthly mortgage payment is somewhat lower than that rent, that might still not meet some of the affordability tests that are there,

We have to ask the question, is that a sensible position for us to be in, or do we need to show a little bit more flexibility in that area?

The FCA has also launched a new five-year strategy to “Support Growth And Improve Lives”, following pressure from ministers for regulators to help grow the economy.

The chair of banking giant HSBC has warned that globalisation in its current form “may have now run its course”.

In a speech at the bank’s Global Investment Summit in Hong Kong on Tuesday, Sir Mark Tucker said trade tensions created uncertainty that posed a “serious potential risk to global growth”, the Financial Times reports.

Tucker pointed out that the world is experiencing a “period of deep and profound change” in trade, economic policy and international security arrangements, adding:

“As we consider present developments . . . we believe that globalisation as we knew it may have now run its course.

Economic considerations guiding optimally efficient supply chains led to one of the world’s greatest periods of wealth creation we have ever seen. The balance of economic power changed as a result, and what used to be sustainable no longer is.”

Tucker argues that rather than deglobalising, there will be stronger “political groupings and trade blocs”, including the “Brics-plus group of countries”, which would increasingly trade with each other.

The original Brics group - Brazil, Russia, India and China – was created as an idea in 2001 ago by then-Goldman Sachs economist Jim O’Neill. Today, the founding four no longer share similar economic trajectories – although, in their own ways, they do have a more powerful impact on the world economy than two decades ago…

Sentiment among companies in Germany has brightened, as firms in Europe’s largest economy grow more optimistic about economic prospects.

Companies were more satisfied with their current business situation, and their expectations rose noticeably. German businesses are hoping for a recovery, reports research group Ifo this morning.

Ifo’s Business Climate Index has risen to 86.7 points in March, up from 85.3 points in February.

Ifo reports:

In manufacturing, the index rose significantly. In particular, expectations have become noticeably less skeptical. Assessments of the current situation also improved. However, order books saw a slight decrease.

In the service sector, the business climate picked up. Companies rated their current situation somewhat more positively, and expectations became clearly more optimistic. Architectural and engineering firms, in particular, were increasingly hopeful.

In trade, the index rose once more. Expectations among traders were notably less pessimistic, and firms assessed their current business somewhat better.

In construction, the business climate brightened. Companies evaluated their current situation somewhat more positively. Expectations improved but remain highly skeptical. A lack of orders continues to be the greatest challenge for the construction industry.

UK consumers are cutting back spending on everyday items amid falling confidence in the UK economy before Rachel Reeves’s spring statement, according to a survey.

As the chancellor prepares to confirm billions of pounds in cuts to welfare and government spending on Wednesday, the research by KPMG showed growing numbers of people in Britain believed the economy was heading in the wrong direction.

The survey of 3,000 UK consumers found 58% felt Britain’s economy was worsening in the three months to the end of February, an increase of 15 percentage points from the three months to the end of November.

Although most people reported feeling financially secure, the growing negative economic perception led more consumers to respond by cutting their spending and changing their buying habits.

Shell chief executive Wael Sawan’s pay package rose by 8.5% last year, to £8.6m, attracting criticism from environmental campaigners.

Sawan’s pay rose from £7.9m in 2023, Shell’s annual report shows this morning, due to increased bonus payments such as through its long-term incentive plan.

The increase came despite a fall in Shell’s profits last year – the oil major posted adjusted earnings of $23.7bn last year, down from $28.25bn in 2023.

Shell also handed $8.7bn to its shareholders through dividends last year, and also spent $13.9bn on share buybacks. It is also sticking with its goal of raising dividends by 4% per year.

Under Sawan’s leadership, Shell has been criticised for watering down its pledge to cut carbon emissions, and also cut hundreds of jobs at its low-carbon division.

Patrick Galey, investigations lead at Global Witness, says Sawan’s pay is ‘obscene’:

“After a year of unchartered climate extremes and huge energy bills, which are set to spike again in many countries this year, Wael Sawan’s obscene pay packet will feel like a slap in the face for millions.

“It’s maddening to know that Big Oil bosses like Sawan are raking it in, as they double down on the oil and gas that’s fuelling climate devastation, and continue to profit from an energy crisis that’s leaving so many of us poorer.”

“We shouldn’t have to witness another year of corporate greed at the expense of people and planet – it’s time governments held big oil firms like Shell to account. Instead of allowing oil giants to hand out billions to wealthy shareholders and shower their bosses with lavish pay checks, governments should be making them pay climate damages.”

Elsewhere in the auto industry, Hyundai has unveiled plans to make a record $21bn investment in the US, to protect itself from the threat of tariffs from President Donald Trump.

Hyundai plans to spend about $21bn in the US by 2028 to increase vehicle production, including a new $5.8bn Hyundai Steel plant in Louisiana that will produce over 2.7 million metric tons of steel annually

Chairman Chung Euisun said the new steel works will strengthen the steel supply chain in the US. He also pledged the company would also purchase $3bn of US liquefied natural gas, explaining:

“It’s deepening our partnership with the United States and reinforcing our shared vision for American industrial leadership.”

Trump has hailed the news as vindication of his strategy of pressuring foreign manufacturers to create American jobs, calling it a “clear demonstration that tariffs very strongly work.”

The US president told an event at the White House:

“We’re delighted to report that Hyundai is announcing a major $5.8bn investment in American manufacturing.

Money is pouring in and we want to keep it that way.”

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

European car sales have dropped this year, with Tesla’s market share tumbling as buyers turn to other electrc vehicle makers.

New sales data just released show that Tesla’s market share in the European Union, the UK and the EFTA zone (Iceland, Liechtenstein, Norway and Switzerland) has shrunk to 1.8% so far this year, down from 2.8% in January and February 2024.

In the first two months of this year, Tesla has sold 26,619 vehicles in the EU + EFTA + UK region, down from 46,343 a year ago. That’s a fall of over 42%, data from the European Automobile Manufacturers Association (ACEA) shows.

The scale of the slide will reinforce speculation that Elon Musk’s role at the Trump White House is hurting Tesla. Protests at the company’s showroom have been rising in the US since Musk’s Department of Government Efficiency began slashing jobs across the Federal government.

Pam Bondi, the US attorney general, has condemned vandalism and damage to Tesla dealerships and charging stations as “domestic terrorism”.

In Britain, groups such as “Tesla Takedown UK” and “Everybody Hates Elon” group have been coordinating protests against the company – with some supporters motivated, it appears, by Musk’s endorsements for far-right politicians.

Despite that, Tesla’s sales in the UK actually rose by a fifth last month.

But in the European Union alone, Tesla’s sales have almost halved so far this year, down 49%, as the company misses out on a rise in sales of electric vehicles.

Analysts have suggested that Tesla’s relatively aging line-up may be counting against it.

Felipe Muñoz, a global analyst at Jato Dynamics, said yesterday:

“Tesla is experiencing a period of immense change. In addition to Elon Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version of the Model Y – its bestselling vehicle – before it rolls out the update.

“Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover.”

Jato’s data has also shown a slump in Tesla sales this year.

While Tesla hits a tough patch, Chinese rival BYD is powering ahead. Yesterday it reported its annual sales had exceeded $100bn for the first time in 2024, overtaking Tesla.

Across the first two months of 2025, new battery-electric car sales in the EU grew by 28.4%, to 255,489 units, capturing 15.2% of total market share. ACEA reports that there were “robust double-digit gains” in Germany (+41%), Belgium (+38%), and the Netherlands (+25%), although they dipped by 1.3% in France.

In contrast, sales of petrol sales in the EU + EFTA + UK are down 21.9%.

And across all car types, new EU car registrations declined by 3% in February compared to the same period in 2024.

ACEA says:

Notably, the bloc’s major markets saw declines, with Italy (-6%), Germany (-4.6%), and France (-3.3%). Spain conversely recorded an 8.4% increase.

The agenda

• 9am GMT: IFO survey of Germany’s economy in March

• 11am GMT: CBI’s distributive sales survey of UK retail

• 1pm GMT: S&P/Case-Shiller index of US home prices

• 2pm GMT: US home sales for February

• 2pm GMT: US consumer confidence report