A new battle has emerged between the two titans of weight loss drugs: Novo Nordisk has accused Eli Lilly of “deliberately false” claims about its weight loss products in an ad campaign.

The Danish drugmaker filed a lawsuit against its rival in a US federal court today, accusing Lilly of false advertising in claiming its weight-loss medicines outperform Novo’s products.

Novo alleges Lilly compared the highest approved doses of its medicines with lower doses of Novo’s Wegovy and Ozempic drugs, and also excluded newer, higher-dose versions that Novo says deliver greater weight ‌loss.

Lilly produces rival products such as the obesity drug Zepbound ⁠and diabetes treatment Mounjaro.

Novo wrote in its complaint:

The ads are maliciously and deceptively false because Lilly knowingly cites outdated clinical trials that compare the highest ‌doses of the Lilly medicines to lower doses of Novo Nordisk’s medicines.

Shares of Eli Lilly are down 0.5% in pre-market trading, while Copenhagen-listed Novo Nordisk is down 1.8%.

The US stock market is poised to rise when it opens later this afternoon, with semiconductors stocks expected to continue their recovery from a sell-off last week.

Futures for the blue chip S&P 500 index are up 0.35%, while the tech heavy Nasdaq is poised for a 1.21% rise. Futures for the Dow are up 0.18%.

Oil prices are rising today, as the Yemeni Houthi movement continues to threaten an attack on Saudi Arabian ports.

Brent crude, the international benchmark for oil prices, is up by 1% to $90.21 a barrel today, after reports that the Iran-backed Houthis have emailed multiple shipping companies with warnings about loading or discharging cargo at Saudi ports.

The International Energy Agency has said it is closely monitoring the situation in oil markets.

Executive director Fatih Birol said in a statement:

The escalation in hostilities affecting the strait of Hormuz and energy infrastructure in the region increases security of supply concerns and uncertainty over the market outlook. Threats to the Bab el-Mandeb Strait, which has become increasingly important as a route to bypass the Strait of Hormuz, exacerbate these concerns further.

For the moment, crude oil markets continue to benefit from several cushioning factors.

These include significant supplies from Gulf producers – notably through major efforts by Saudi Arabia and the United Arab Emirates – that are continuing to reach global markets via alternative routes to the strait of Hormuz, as well as volumes still managing to pass through it. We estimate that Gulf exports are below their late-June highs but are still considerably higher than the levels seen between early March and mid-June.

He added that oil producers such as the US, Brazil, Venezuela and Kazakhstan have increased their exports. The IEA has also released 290m barrels of oil from its emergency stock since its announcement in March to make 400m available.

There is no room for complacency on oil security amid the escalation in hostilities and a continued drawdown of available commercial inventories. Refinery activity and product supplies have not picked up as much as crude deliveries, meaning that markets for refined oil products, including diesel and gasoline, are considerably tighter than those for crude.

In natural gas markets, increased LNG flows from other markets, led by the United States and also Canada, have offset around 70% of the lost supply via the strait of Hormuz, but further delays in resuming Gulf exports risk keeping markets tighter for longer. This will be felt by all LNG importers, including Europe as it looks to refill its gas storage for next winter.

The IEA continues to maintain that a resolution to the ongoing conflict that includes a full and unconditional reopening of the strait of Hormuz will be essential to avoid a further deterioration in global energy security.

Elsewhere this morning, the London Stock Exchange has announced plans to launch 24-hour trading.

The LSE will open a new venue outside of the main market that will allow investors to trade “near” continuously from Monday to Friday.

The new “LSE 24” will operate from 5pm until 7.50am in London and is expected to be ready for client testing by the end of 2026, the company said this morning.

Julia Hoggett, chief executive of the LSE, said:

The launch of LSE 24 marks an important step in the evolution of our markets, providing clients with greater flexibility beyond traditional trading hours and supporting more digital, connected global markets.

By integrating with LSEG’s digital markets infrastructure, LSE 24 will help support deeper liquidity, greater efficiency and broader participation in our markets, reinforcing London’s position as a leading global financial centre.”

It comes as London’s stock market struggles to attract new listings, and several companies – such as the outsourcer Mitie today – are preparing to leave the market after agreeing to takeover deals.

Several major exchanges are looking for ways to stay competitive, attract more investors and increase their liquidity – the New York Stock Exchange, Nasdaq and Cboe have all proposed extending their trading hours to 23/5, which means they would be closed for just one hour a day, plus weekends.

More reaction on Andy Burnham’s decision to cut VAT on household electricity bills – Caitlin Boswell, deputy director at the campaign group Tax Justice UK, suggests the policy is welcome but that the government needs to go further:

Millions of people around the country worry about how they can afford their bills and the basics, so it’s a good sign that the new prime minister is acting on this right away, even if the support is very modest. We’d urge Burnham and his government to announce changes that would truly rewire the economy and make the tax system fairer, so the super-rich pay their fair share of tax.

This can tackle three things at once; making the basics more affordable, acting on extreme wealth inequality, and investing in all regions to grow prosperity, create jobs and help build pride in the places we live.

Adam Scorer, chief executive of the fuel poverty charity National Energy Action, adds that the new policy is not as helpful for households who rely on gas.

Heat and power are essential services that should be exempt from VAT. Of course, this decision is on electricity alone. It will help everyone, but will be less useful for the huge majority of low-income households who heat their homes with gas and cannot afford the upfront cost of shifting to solar, batteries and heat pumps. It is not a trivial distinction.

I hope this is the first of a series of policy decisions on energy debt, levies, social tariffs and supporting fuel poor households towards cheaper, low carbon heating systems. If so, we may see an approach to energy policy that tackles both the immediate pressure on household energy bills and a progressive shift to a low-carbon future.’

More on the cost of living: new figures show that UK grocery inflation eased in the four weeks to 12th July to 2.6%, its lowest rate since December 2024.

It marks the fifth consecutive month of slowing price rises, Worldpanel by Numerator found.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said:

Easing price rises will come as welcome news to shoppers, but the annual bill tells a fuller story. The average household spent £5,530 on groceries over the past twelve months to July, up £156 on the same period last year - a reminder that even as the rate of inflation cools, the cumulative cost of the weekly shop keeps climbing.

The research also found that sunny weather and the World Cup has helped boost grocery sales this summer: British shoppers made 497 million trips over the four weeks, an average of 17 per household and the highest figure recorded since March 2020.

Trips including beer or cider purchases rose 8% year-on-year, and no/low alcohol trips were up 10%. Spending on burgers rose 25%, frozen lollies up 17%, and bottled water was up 23%. Wimbledon added its usual boost, with £77m spent on strawberries and £21m on cream.

The group of investors pursuing a rescue bid for Thames Water have offered the government a “golden share” in a last-ditch attempt to convince Andy Burnham not to nationalise Britain’s biggest water company.

London & Valley Water (L&VW), a consortium of 100 institutional investors that hold £17bn of the company’s £21bn debt, said it recognised that the new prime minister wants greater public control and to strengthen accountability of the water company.

The creditors said on Tuesday they were working on a revised rescue package for Thames, including the “golden share”, which would give the government a veto over important decisions and hostile takeovers.

It said:

L&VW agrees that there is an opportunity to enhance the way local government, regulators and Thames Water work together, granting greater public controls on critical business issues to improve delivery of complex, essential infrastructure projects, and demonstrate shared accountability.

The consortium is willing to make significant new commitments to grant greater controls and oversight to ministers, implemented through a ‘golden share’.

Elsewhere on the corporate front – the outsourcer Mitie has agreed to a £3.1bn takeover by its private-equity owned rival OCS Group, making it the latest London-listed company to be acquired this year.

Its board has recommended that shareholders accept a cash offer of 221.6p a share, a 46.8% premium to Monday’s closing price.

Mitie, which was founded in 1987 and employs 84,000 staff, specialises in facilities management, such as engineering maintenance and other services such as hygiene and security.

The news comes after its chief executive Phil Bentley announced last month that he would leave in March 2027 after more than 10 years in the top job.

Rob Legge, OCS chief executive, said:

This is an important milestone for both organisations and an exciting opportunity to bring together two highly complementary businesses with a shared commitment to delivering the best outcomes for colleagues and customers.

Subject to completion, we would build a British facilities management group that is better positioned to support the organisations that keep the country running. Together, we can better support existing and new customers, help more people into work and strengthen our contribution to getting Britain moving.

While there is a long process ahead, both businesses remain focused on supporting customers and delivering the high standards they expect every day. Together, we can build something remarkable for our colleagues, our customers and the country.

OCS is owned by the private equity firm ​Clayton, Dubilier & Rice.

The deal, which is expected to complete in the first quarter of 2027, is the latest in a long string of takeovers on London’s stock market – Intertek, easyJet, Beazley and Schroders have all agreed to takeovers this year, while the US property group Prologis has made repeated attempts to buy its FTSE 100 rival Segro.

Mitie shares have shot up 41% this morning to a record high of 213.6p.

The UK’s blue chip FTSE 100 index has opened slightly lower this morning, down 0.3% – but some of its biggest defence stocks are rallying amid excitement that a former defence secretary now occupies No 11.

Babcock International is up 4%, while BAE Systems is up 2.4%. Over in the FTSE 250, Qinetiq is up 3.5%.

Investors are hoping that chancellor John Healey will use his new position to increase defence spending – possibly though issuing “defence bonds”, a form of borrowing allocated only for the military which he has previously advocated for in government.

But Chris Beauchamp, chief market analyst at the broker IG, warns that Healey’s appointment does not necessarily lead to an immediate windfall for defence.

As chancellor, he will have many competing demands, and won’t just be the MoD’s man in No 11. His experience made him an obvious candidate for the role, and he represents a middle way between Miliband and Mahmood, but it will not be easy to find lots more cash for defence, especially when the new PM is so busy making broad spending commitments in other areas.

Gilt yields are down slightly this morning, after rising late yesterday following comments from Andy Burnham that he will use “flexibility” in the fiscal rules to bolster public investment.

The yield on the 10-year gilt is about 1 basis point lower, though crucially still above the 5% level at 5.03%.

Bond markets are highly sensitive to comments from Burnham, amid expectations he could run a looser approach to public finances than Keir Starmer and Rachel Reeves. However investors may have taken comfort this morning from official figures which showed that the government borrowed less than expected in June.

But Burnham has also promised more cost of living support, which will not be cheap. The VAT cut on household electricity bills announced today is expected to cost £850m and Healey is expected to outline more long-term action to bring down living costs at the budget later this year. There has been speculation around reducing the cap on bus fares and temporarily freezing rents in the private sector.

Sterling is still standing firm against the US dollar, up by 0.13% to around $1.34.

Paul Nowak, general secretary of the TUC, says that the economic data released today show that Burnham is “doing the right thing by pledging action on the cost of living”.

Working people are up against it with stagnant real pay, over a million people stuck on insecure zero-hour contracts, and a million young people not in employment, education, or training.

Cutting VAT on energy bills will provide some welcome relief. But with Donald Trump’s illegal war in Iran continuing to drive up bills, the government will need to go further. The new prime minister could raise up to £60bn over four years by hiking taxes on banks – and use it to bring down bills further for households across the country.

Andy Burnham is sending the right signals by pledging to help young people into work. In the months ahead, he will need to expand the youth jobs guarantee and double down on his pledge to reindustrialise Britain and deliver good growth in every postcode.

Meanwhile the boss of JP Morgan, Jamie Dimon, has warned Burnham against raising tax charges on banks, suggesting it could threaten plans to build its £3bn headquarters in London and drive investment away from Britain.

The chief executive of the world’s biggest bank, who has a track record of criticising the UK’s bank tax surcharge, does not want to see the UK’s new prime minister targeting the banking industry to raise extra revenue. Read more here:

New figures from the ONS show that unemployment remained at the same level as in April, at 4.9% – highlighting one of the many tough tasks ahead for Andy Burnham.

Employers cut the number of job vacancies down to 712,000, almost half the level in 2022, as employers put off hiring new staff in the three months to May.

The new prime minister has promised to raise living standards across all regions as part of a 10-year economic plan, but the latest pay data showed private sector earnings growth dropped to 2.9% to leave the average rise in earnings, including bonuses, at 4.3%.

Economists had forecast a rise in average pay with bonuses in the three months to May of 4.5%, up from 4.4% for the three months to the end of April.

Thomas Pugh, chief economist at the consulting firm RSM UK said the figures pointed to “a labour market with a whiff of staleness about it, but it’s still loosening gradually”.

That gives the MPC good cover to keep rates unchanged next week as it waits to see the impact of the latest escalation in fighting in Iran on inflation.

Meanwhile, stagnant, or even negative, real wage growth in the second half of this year will intensify the pressure on Burnham and Healey to come up with a package to support the cost of living. However, doing anything substantial without breaching either the fiscal rules or the manifesto commitments looks increasingly difficult, given the deterioration in headroom.

…Looking ahead, the unemployment rate will most likely continue to climb gradually through the summer as the full impact of the surge in input costs, tighter financing and higher uncertainty weighs on hiring appetite.

What’s more, wage growth in the 3.0%–3.5% range means that even with lower oil prices, real wages are likely to stagnate in the second half of this year, despite the reduction in VAT on electricity, which will shave 0.1 percentage points off inflation. That presents a major challenge for the new government, which has made tackling the cost of living a priority.

The removal of VAT from electricity bills is positive but it does not address the scale of the problem that British households are facing, campaigners at the End Fuel Poverty Coalition have said.

Simon Francis, coordinator of the group, said:

Removing VAT from electricity bills is a positive statement of intent by the new administration. But it does not address the scale of what households are facing, with millions still left paying an unaffordable share of their income on energy and record levels of energy debt built up over successive winters of high bills.

The prime minister’s next move must be to go even further on bringing down the cost of energy and bringing in increased levels of targeted support for those who need it most: an enhanced warm home discount, reformed cold weather payments and an energy debt relief scheme.

This breathing space is also not a cure. The only way to bring bills down for good is to change how they are set. That means breaking the link between gas and electricity prices, tackling excess profits in the energy industry and ending our exposure to volatile fossil fuel markets through homegrown renewables and more energy efficient homes.

But many in the energy industry are welcoming Burnham’s move today, including Martin Pibworth, chief executive of SSE,:

Cutting VAT gives immediate relief to homes and businesses and is a very welcome first step to making electricity as cheap as possible. Electrifying our economy is the way we take advantage of cheap, homegrown renewable power to cut bills, reduce energy dependence and boost economic growth.

SSE added that its analysis found that 70% of the increase in domestic energy bills since 2017 has been driven by global commodity prices and inflation.

Richard Neudegg, director of regulation at Uswitch.com, added that the removal of VAT on electricity bills in October could help households deal with global rises in energy prices triggered by the conflict in the Middle East.

There is continued pressure on wholesale prices, driven by the situation in the Middle East, meaning it is likely that the October 1 price cap will increase.

Some supplier predictions suggest the next price cap could rise 5% from October for a household with both gas and electricity, so this tax change could take the sting out of a potential increase.

There’s still time for customers to lock in significant savings before winter by switching to a good-priced fixed tariff.

The cheapest deals are currently undercutting standard rates by £210 for the average household. Doing so on top of this VAT change could leave households considerably better off over the winter.

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

New prime minister Andy Burnham has announced this morning that VAT will be cut from household electricity bills, as part of his plan to help with the cost of living.

The PM has said he will remove the levy from 1 October, in a move that is expected to take around £45 off the yearly price cap set by the energy regulator.

The government said the decision would be funded by savings from the cancellation of its digital ID programme, which was expected to cost £1.8bn over the next three years. The VAT cut is estimated to cost around £850m in 2026/27 based on forecasts for electricity prices, ministers said.

Burnham said in a statement:

Westminster has not been working for people for too long, with families struggling with the cost of living.

That needs to change. I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as prime minister.

We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.

It comes just a day after Burnham officially became prime minister with a pledge for a “new economic model” for the country.

But the government added this morning that “any further action, including on funding for longer-term measures, will be taken at the budget, and all decisions at that point will be funded and also consistent with the government’s fiscal rules.”

Investors will be watching the bond market carefully today as it weighs the appointment of Burnham’s new cabinet, including the surprise appointment of former defence secretary John Healey as chancellor.

Public sector finance figures released this morning should provide a boost – borrowing for June came in at £15.989bn, below expectations of £18bn and down from £23.94bn a year earlier.

The difference between total public sector spending and income was £16bn in June 2026, according to data from the Office for National Statistics. This was £7.9bn (33.1%) less than in June 2025.

It was £300m lower than the Office for Budget Responsibility (OBR) forecast, largely because of lower inflation-linked debt interest costs.

This should offer some comfort to bond investors today, alongside Healey’s comments last night:

Fiscal control is the first duty of any chancellor. It is mine. And fiscal credibility is the bedrock for economic stability and for national security, and you heard the prime minister this afternoon say, in this more dangerous world, we will meet our commitments on defence to our international allies…

The agenda

• 7am BST: ONS Labour market figures and public finances

• Today: New PM Andy Burnham to announce cost of living measures