Our main stories today:

The Canadian family that once owned Selfridges department store has bought UK pharmacy and beauty retailer Boots for $8.9bn (£6.74bn).

Wittington Investments, the holding company of the Weston family that controls the Loblaws grocery chain and Drugmart pharmacy chain in Canada, will own Boots’ UK and Irish retail operations and opticians chain, the No7 beauty brand and a franchise arm in Thailand.

The acquisition of the Nottingham-headquartered chain, which has 1,800 stores across the UK and employs 50,000 people, is also being backed by investment firm Fairfax, which owns Sleep Country Canada, Canada’s largest mattress retailer which owns Simba Sleep in the UK, and The Sporting Life Group.

Galen Weston, the chair of Wittington who is set to become chair of Boots, said:

Boots is one of Britain’s most enduring businesses, with a rich heritage, a trusted name and a vital role in everyday life across the UK and Ireland.

Royal Mail is to cut up to 2,500 jobs as the embattled company seeks to restructure its business amid intense competition and the continuing decline in letter deliveries.

The postal service, which has been fined a total of £37m since 2023 for missing delivery targets set by the regulator Ofcom, said the job cuts would focus on head office and “support function roles” with the restructure to be completed by the end of next year.

Pointing out that the volume of letter deliveries had declined more than 70% since their peak in the mid-00s, Royal Mail said the cuts would be achieved through “natural attrition” and a voluntary exit programme with no compulsory redundancies.

The company said there would be no reduction in operational frontline roles in delivery and processing, including the number of postal workers and drivers it employs. The cuts amount to less than 2% of Royal Mail’s workforce of more than 131,000.

The head of the International Monetary Fund has called on governments across big economies to tighten their belts as soaring bond yields hit budgets.

Speaking in Singapore, the IMF’s managing director, Kristalina Georgieva, said global debt-to-GDP ratios were at their highest level since the second world war and on course to hit 100% in the coming years.

She said governments could not rely on rapid economic growth to lift the burden of debt – and instead would have to make “very tough political choices”.

Georgieva was speaking before the IMF and World Bank annual meetings, which are to be held in Bangkok next week. “My message to the world’s economic policymakers will be this: we cannot keep delaying necessary policy action – you have the tools, now have the wisdom to use them.

Thank you for reading. We’ll be back tomorrow with the latest news. Take care – JK

Boots has been acquired by the investment company of the Canadian branch of the billionaire Weston family, for $8.9bn including debt.

Wittington Investments said it had entered into a “definitive agreement” to buy Boots, which is majority owned by the US private equity firm Sycamore Partners, in partnership with Stefano Pessina and his family.

Boots, which dates back to 1849 when it was founded in Nottingham by John Boot, has 1,800 stores in the UK and employs 51,000 people.

Under the terms of the deal, Wittington will acquire Boots’ retail operations in the UK and Ireland; Boots Opticians; and the No7 Beauty Company; and its Thailand and franchised businesses.

Wittington said it plans to invest in the chain, upgrading stores, improving the website and expanding healthcare services.

Sycamore, in partnership with Pessina and his family, will retain ownership of the Boots group’s other interests in Farmacias Benavides and Alliance Healthcare Deutschland. Sycamore bought the wider Walgreens Boots Alliance business for $23.7bn in 2025.

The Boots chief executive Alex Baldock said:

Boots matters. Every day, our colleagues give millions of people longer, healthier and happier lives.

For all of our social impact and commercial success to-date, the opportunity ahead is even greater. I look forward to making the most of that opportunity and building a world class Boots for our colleagues, customers, patients, and communities.

The deal marks the return of the Canadian branch of the Weston family to the UK high street, after it previously owned Selfridges. The family later sold the department store chain for £4bn in 2022. The Westons are widely known throughout Canada for owning the grocery store Loblaws and the pharmacy chain Shoppers Drug Mart.

The UK branch of the family, which operates its businesses through a separate investment vehicle, is known for holding a majority stake in Primark through the parent company Associated British Foods.

News of the prospective Weston deal comes months after Sycamore tried and failed to sell Boots to the Australian pharmaceutical group Sigma Healthcare in a deal that would have valued the business at $10bn this summer.

Boots has changed hands several times in the past 20 years. After a merger with Alliance Unichem in 2006, the combined company was taken over by the private equity firm KKR in 2007, before Walgreens first took a 45% stake in 2012 and then completed a takeover at the end of 2014.

Galen Weston, who chairs Wittington, will become chairman of Boots. He said

Boots is one of Britain’s most enduring businesses, with a rich heritage, a trusted name and a vital role in everyday life across the UK and Ireland. We have great respect for Boots’ legacy and leading market position. We see a meaningful opportunity to make a great business even better through stable long-term ownership, further capital investment, and the renewed operating focus required to serve customers with excellence for generations to come.

Pessina described Boots as “an iconic brand and a British institution”.

It has been one of the privileges of my and Ornella’s life to have been so closely associated with Boots over the last 20 years. We are delighted to be passing on a thriving Boots to strong and reliable owners who understand the value of its great heritage.

Unite has slammed Royal Mail’s plans to cut up to 2,500 jobs by the end of next year as the result of “years of inaction” and said it would fight this decision “every step of the way”.

The union said the company, the government and the regulator Ofcom had failed to tackle the serious problems facing Royal Mail, especially high competition from gig economy postal services, it said.

Unite general secretary Sharon Graham said:

Unite CMA [Communications Managers’ Association within the union] has been warning for some considerable time that unless the government and Ofcom address the serious challenges facing Royal Mail, further jobs will be put at risk.

This is not good for employees or customers. It will not improve quality of service and the workforce must not be made the scapegoats for poor decisions made by the company, government or Ofcom.

Without urgent action, this will happen again. More jobs will be lost, employment standards will continue to fall and customers will continue to be let down. The answer cannot simply be another round of job cuts.

Unite CMA has repeatedly warned that without urgent intervention to modernise the service, tackle the gig economy and create a level playing field across the delivery sector, further job losses are inevitable. It said the government must review the regulatory framework governing the postal industry to ensure positive action is taken.

Unite CMA national chair Gary Sassoon-Hales said:

These devastating job losses have been directly caused by years of inaction. Unite will not stand for our members being penalised for a situation that is not of their making.

Unite is now supporting our affected members at Royal Mail during this very difficult time and is committed to fighting this decision every step of the way. Firm change, not further job losses, is what is needed to ensure the future of Royal Mail.

Unite CMA represents managers, professionals and staff employed across Royal Mail and the wider communications sector.

Five former Barclays traders, jailed in the UK for plotting to rig ⁠global benchmark interest rates used to set mortgages, loans and other financial products, won ⁠an appeal to clear ​their names today.

London’s Court of Appeal quashed the convictions of Philippe Moryoussef, from France, Calcutta-born Jay Merchant, ⁠Britons Colin Bermingham and Jonathan Mathew and Alex Pabon, an American. Judges will lay out their reasons later today.

This unravels some of the UK Serious Fraud Office’s most high-profile prosecutions.

Prosecutors portrayed the traders as a symbol of banker greed at a time ⁠of taxpayer fury at staggering bank bailouts during the 2007-2009 financial crisis, which sent stock markets plummeting and economies into recession.

Last year the Supreme Court overturned the ‌convictions of Tom Hayes — a former star trader at UBS and Citigroup — and ex-Barclays trader Carlo Palombo for rigging the now-defunct interbank interest rate ‌Libor and its euro equivalent, Euribor.

The Supreme Court ruled that the trial judges had misdirected juries and that legal errors undermined the fairness of the trials, laying the groundwork for today’s Court of Appeal decision.

Merchant, Pabon, Moryoussef, Bermingham and Mathew were sentenced to between 33 months and eight years in jail between 2016 and 2019 after a series of landmark SFO trials.

Designed to estimate the costs at which banks would lend to each other, Libor and Euribor were once a benchmark for interest rates underpinning around $450 trillion of financial contracts, from derivatives to student loans.

“It’s hard to take in,” said a tearful Bermingham, 70, outside the courtroom, according to Reuters. “You don’t believe it until you hear ‌it.“

Moryoussef, now 58, gained notoriety for jumping bail and fleeing to his native France. He was tried in London in his absence, sentenced to eight years in jail and has remained a fugitive since.

“Today, I ​am regaining my soul, and for the first time, I can envision my next chapter in peace,” he said in a statement.

Mathew, 45, said that having his conviction quashed was about “finally having validation that this is an injustice that never should have happened.“

The SFO, which did not contest the appeals, reiterated in a statement that the Supreme Court had found “ample evidence” on which a properly directed ⁠jury could have convicted Hayes and Palombo.

But it added:

After carefully considering this judgment and the full circumstances, ​we do not oppose the appeals ​of five individuals convicted by juries in relation ​to Libor and Euribor.

A further appeal by Christian Bittar, a French former star Deutsche Bank trader ​sentenced to jail in 2018, ‌is expected to be ​heard on Friday.

Bittar, once described as ​one of the world’s most skilled traders, is the only case being contested by the SFO following his guilty plea more than eight years ago.

A US startup has reported positive results for an experimental new Parkinson’s treatment from a late-stage clinical study, and plans to meet with the regulator.

Boston-based Cerevance, a company part-funded by the UK’s SV Health Investors Dementia Discovery Fund, carried out a phase 3 trial with 341 volunteers to test its Parkinson’s medication solengepras, which met its main goal with statistical significance.

When given the drug as an add-on treatment once a day, patients reported improvements in daily function, daytime alertness, and quality of life. The company says the medication restores balance by regulating just one side of brain circuit, and doesn’t act directly on dopamine unlike other therapies, which means there are fewer side effects.

Parkinson’s affects around 166,000 people in the UK and nearly 12 million worldwide, with the global number projected to more than double by 2050.

Cerevance plans to meet with the the US regulator, the FDA, to discuss the path to a potential application for approval.

Other Parkinson’s therapies target the molecule dopamine, which acts as a brain messenger that helps muscles to move smoothly. Daytime sleepiness, a known side effect of today’s dopamine-based drugs, improved, Cerevance said.

Cerevance was founded in late 2016 as a joint venture between Californian venture fund Lightstone Ventures and Japanese drugmaker Takeda Pharmaceuticals.

The owner of embattled South West Water, Exeter-based Pennon Group, has launched a £550m investor cash call and cut the water company’s shareholder dividend to help it fund infrastructure investment, just days after it was hit by a record £7.9m fine for hundreds of sewage spills.

The London-listed company, which supplies water to some 3.5m customers across the south west of England, as well as 380,000 business customers around the UK, said the rights issue would help to support a £1bn investment “to drive improved outcomes for customers and communities”.

Pennon’s new boss, Keith Haslett, who was appointed chief executive in April, said he had conducted a comprehensive review of the business and had identified areas for improvement, including customer service and the firm’s environmental performance.

South West Water was fined nearly £8m in September by a judge, who issued the largest fine for environmental offences in the region and said the company’s conduct amounted to reckless failures in management systems and response to known risks.

The company was fined after hundreds of sewage spills during a six year period at popular bathing spots including the coastal village of Harlyn in north Cornwall and in sensitive habitats, like the River Camel, which is home to otter and Atlantic salmon and popular with birdwatchers and sailors.

Pennon said it would also slash its shareholder dividend by about 30%, including the impact of the equity raise, as part of its “operational reset”.

Shares in Pennon, which also owns Bristol Water and SES Water, tumbled as much as 22% during morning trading following the company’s announcement, named “project Proteus”, after a sea god in Greek mythology. The shares are still the biggest loser on the FTSE 250 index, down 21.1%

Haslett told reporters the reaction to the company’s plans had been “mixed”, saying:

Investment is needed to achieve improvements – we’re funding the plans in the right way.

He added this would not be funded by further increases to customers’ bills and said he was also bringing some critical roles back in-house, including leakage teams which were previously outsourced.

O2 has struck a record deal thought to be in the region of £200m to retain the naming rights to the London venue the O2 in the largest renewal of its kind in UK history.

The 10-year agreement will extend O2’s relationship until at least 2038. It cements the sponsorship as the second longest-running UK stadium naming rights deal after Arsenal’s partnership for the football club’s London ground,

Under the deal with Anschutz Entertainment Group (AEG), which bought the site of the ill-fated Millennium Dome five years after it was shut following the millennium celebrations, O2 is thought to be paying about £20m a year in the wide-ranging partnership.

This is an almost 50% increase on the annual amount under the existing deal which was due to expire at the end of next year. It is more than triple the £6m a year O2 paid in its initial 10-year deal when the future success of the O2 and surrounding site was far from certain.

If recent complaints are believed, London and the UK are no longer welcoming for ultra-high net worth individuals.

London was once globally renowned as the “billionaires’ playground”, where the world’s super-rich could relax in the Georgian townhouses of Mayfair undisturbed by the grasping hand of the state.

But if recent complaints by fleeing ultra-high net worth individuals are to be believed, the city is no longer as welcoming for those who consider themselves to be Britain’s most-persecuted minority.

They complain of Labour’s stricter tax regime and the antipathy of others towards those with extreme wealth. One even suggested that he was leaving the country because of London’s low-traffic neighbourhoods. The financier Ben Goldsmith said:

If I want to organise a gathering now, I have to take into account a lot of my friends are not here any more,” said . “How the hell are we supposed to pay for health services and everything if we are driving out the highest rate taxpayers?

Also on the energy front, our economics correspondent Richard Partington travelled to Gdansk, to look at Poland’s ‘solidarity’ push for EU energy resilience in face of Russian aggression.

Two miles off the coast of Gdańsk, the white steel piles of Poland’s first offshore gas terminal rise from the slate-grey Baltic. Installed at a height eight metres above the waves, the floating cranes and construction vessels here are on the frontline of Europe’s push for energy security.

Since the taps were turned off on Russian gas after Vladimir Putin’s invasion of Ukraine four years ago, Poland has turned to the global energy market for supplies. But while conditions are far from ideal as the Middle East war drives oil and gas prices to stratospheric levels, strengthening the diversity of the country’s energy mix remains a top priority for Poland, its Baltic neighbours, and the EU at large.

Looking out to sea from the windswept beach backed by pine forest, Maciej Wawrzkowicz, the offshore project manager at the national gas company Gaz-System, and the construction manager Krzysztof Polatynski say the Baltic is not an easy place to build.

Before work could start, Polish navy minesweepers were called in to torpedo unexploded mines and bombs from the second world war. Construction is halted by storms, while the sea froze over last winter. But speed is important in this project of international significance.

Shell’s refineries are expected to make almost double the profit from every barrel of fuel produced owing to record prices caused by shortages around the world.

In a market trading update, the energy supermajor forecast profit margins of $42 a barrel in the July to September period, far above the $24 a barrel of the second quarter and the previous high of about $28 in mid-2022.

The margins reflect the steep increase in the price of refined fuels, including diesel, relative to the cost of crude oil, as the shutdown of war-damaged refineries in the Middle East and Russia squeezes supplies.

The Middle East crisis helped Europe’s biggest oil and gas company to a profit of almost $10bn (£7.5bn) for the second quarter of 2026, more than double the figure for the same period last year and its second highest quarterly earnings on record.

Today, Brent crude, the global oil benchmark, has risen $1.27 or 1.3% to $101.84 a barrel.

Royal Mail plans to cut up to 2,500 jobs by the end of next year, as it struggles with a slump in letters being sent and seeks to compete in the cutthroat parcel delivery market.

To simplify its processes and save money, Royal has carried out a review of its head office and support functions, and will reduce them by “up to 2,500” – less than 2% of its workforce of more than 131,000 people, it said.

The company, owned since April 2025 by the Czech billionaire Daniel Křetínský, hopes to achieve the reductions through “natural attrition” (people leaving anyway) and voluntary redundancies, without the need for compulsory redundancies.

It stressed that its frontline roles in delivery and processing, including posties and drivers, will not be affected.

Royal Mail said it needs to adapt to a rapidly-changing market: Letter volumes have declined by more than 70% since their peak, whilst customer demand for faster and more convenient parcel delivery services continues to grow.

Royal Mail has briefed its unions, the Communication Workers Union (CWU) and Unite CMA, on the proposals and formal consultation with both unions is now underway.

Alistair Cochrane, the chief executive, said:

We have been working hard to reduce costs and simplify processes across all areas of the business as we transform to win in a very competitive market. These proposed changes remove duplication and allow us to invest further in the service we deliver for our customers.

We are committed to treating everyone fairly and respectfully throughout this process, working closely with our trade unions. The proposed changes will not be easy, but they are an important part of building a stronger, simpler and future-ready Royal Mail for our customers and colleagues.

John Healey is planning a major intervention to cut energy bills for poorer households in this month’s budget, after ministers became alarmed at forecasts that show bills rising by hundreds of pounds in January, the Guardian has revealed.

The chancellor is working on plans to spend more than £1bn to help energy consumers, the bulk of which is likely to go towards increasing the discount given to households on certain benefits.

Sources say final decisions have not been made, but Healey is set to rebuff a call from the energy secretary Miatta Fahnbulleh to spend billions more on removing levies from bills altogether.

Energy officials are working up more radical changes to bills, however, which could be implemented after the budget and would change how much companies could charge customers, rather than subsidising their bills.

If approved, the energy discount will form a major plank of the budget, which government sources say will be low-key but focused on reducing voters’ cost of living.

The chancellor is facing a cash crunch as he looks for money to fund an additional £4.7bn in defence spending and rebuild his fiscal buffer, which has been eroded by higher borrowing costs.

He is likely to raise taxes to pay for the additional spending, and is rumoured to be looking at higher bank taxes in particular.

Government sources had previously insisted the VAT cut to electricity bills which Andy Burnham announced soon after becoming prime minister would be the last support to be offered this year.

Billionaire Mike Ashley’s Frasers Group has snapped up a stake in the US sportswear brand Under Armour.

The owner of Sports Direct acquired an 8.8% stake in the Baltimore-based company, adding to its portfolio of investments in underperforming sportswear brands.

Frasers now holds about 16.6m shares in Under Armour, according to a 1 October filing with the US Securities and Exchange Commission. The stake is worth around $80.1m, based on Under Armour’s closing share price on Tuesday.

Frasers recently disclosed a stake of almost 6% in the German brand Puma, and also acquired the struggling Norwegian sporting-goods retailer XXL last year.

Ashley’s company built its business by snapping up struggling independent sporting goods chains and bumped up its profits by getting the UK rights to ailing sportswear brands – from Head to Slazenger – and using them to decorate its own products.

The acquisitions are part of the entrepreneur’s modus operandi – picking up bargains during tough times and finding the value where he can, from sportswear to luxury brands.

Frasers bought Harvey Nichols, the upmarket department store in London’s Knightbridge, out of administration in August. It sits beside a large slice of Hugo Boss, a chunk of Mulberry, a snippet of Burberry, the remains of Agent Provocateur and the entire Flannels and House of Fraser chains.

French government borrowing costs have jumped, reversing Tuesday’s drop, while US and UK bond yields also rose this morning amid higher oil prices, which add to inflationary pressures.

The yield, or interest rate, on the benchmark 10-year French bond (known as OAT – Obligations assimilables du Trésor) rose as much as 12 basis points to 4.85%, after falling about 11bps on Tuesday.

Not surprisingly, the euro is under pressure again, falling 0.6% against the dollar below $1.12, to $1.1192.

The 10-year UK gilt yield is up 4.6bps at 5.42% after touching 5.44%, but still some way off the 19-year peak of 5.51% hit last week. Bond auctions of two-year and five-year gilts later this morning will test investors’ appetite.

US Treasury yields rose by 4bps to 5.31%.

On Tuesday, the UK chancellor John Healey met economists employed by primary dealers – known as gilt-edged market makers or GEMMs – to gauge market sentiment ahead of his first budget on 28 October.

Economists at Bank of America are forecasting that the budget will lead to a £15bn increase in public borrowing for both the current financial year and the next year, with less room to hit longer-term budget goals.

European stock markets are down, with the UK’s FTSE 100 index falling 41 points, or 0.4%, to 10,500. Germany’s Dax and Spain’s Ibex both lost 0.8%, France’s CAC is down 0.6% and Italy’s FTSE MiB slid 1.3%.

HSBC reportedly plans big job reductions in its UK wealth management division, slashing the ranks of financial advisers and other specialists as it uses AI to serve its wealthy clients.

Half the business’s management and specialist roles are expected to go, along with 70% of financial advisers, the Financial Times reported, citing anonymous sources.

One source described the cuts as “deep, wide and brutal”, adding that almost entire teams would be made redundant, with a consultation underway.

HSBC is thought to have hundreds of relationship managers across the UK. Affected staff are expected to leave the bank at the end of the month.

The bank said:

HSBC UK is a long-established, leading UK wealth manager and premium banking provider. We’re continuing to evolve to deliver more digitally enabled products and journeys to support our best-in-class wealth service and meet the changing needs of our customers.

Turning to the AI boom, where investment as a share of GDP is likely to exceed that of railroads, electricity grids or telecommunications infrastructure, Georgieva said market disappointment could turn into a “far-reaching shock”.

AI companies are under pressure to deliver productivity and profit gains to justify their sky-high valuations, she said.

She added, though, that if done right, AI could add half a percentage point to global growth a year, according to IMF research.

Regulatory oversight is important to

help manage AI’s substantial perils, which including large-scale labour market fallout, serious cyber and stability risks and frontier models threatening to escape human control and run amok.

Ballooning government debt will be discussed by the International Monetary Fund’s 191 member countries in Bangkok next week.

In her speech this morning, the IMF’s managing director Kristalina Georgieva said the growing public debt burden is sapping growth and adding to inflationary pressures. The IMF says public debt is at the highest level since World War II and is forecast to exceed 100% of global GDP before 2030.

Governments can no longer rely on higher growth rates alone to solve fiscal problems, she said.

Some very tough political choices stare us in the face. My message to the world’s economic policymakers next week will be this: we cannot keep delaying necessary policy action — you have the tools, now have the wisdom to use them.

She singled out advanced economies in particular, as reported earlier.

And yet we don’t see decisive action in the high-debt advanced economies where the need of the hour is for credible medium-term fiscal consolidation plans, supported in some cases by upfront fiscal measrues, including to take some pressure off monetary policy.

After five and a half years of above-target inflation, Georgieva said inflationary pressures are persisting, from the AI investment boom, energy and food price shocks, trade tariffs, higher defence spending and higher debt service costs.

Now may be a good time for a prudently hawkish bias in many countries’ monetary policy.

She said recent interest rate hikes by the US Federal Reserve, the European Central Bank and the Bank of Japan were “highly appropriate”. The Bank of England has so far left borrowing costs unchanged, but is expected to raise its base rate at its November meeting.

The UK housing market has come to a standstill, ahead of the introduction of the government’s Your First Home scheme targeted at first-time buyers.

The latest figures from Lloyds Banking Group show prices flat last month, following a 0.3% dip in August. The average property now costs £298,441, while annual growth was also flat.

Andrew Asaam, mortgages director at Lloyds, said:

While the market overall has been fairly subdued, property prices have so far proved resilient during a period of higher mortgage rates, which has been driven by changing expectations around the future path of Base Rate. That’s mirrored in wider economic data, with household spending holding up better than many expected despite energy and other cost pressures arising from the Middle East conflict.

Whether that picture continues is likely to depend on how confident consumers feel that the latest cost‑of‑living pressures will prove temporary. Confidence has long been a key driver of housing market activity, and will play an important role in shaping demand over the remainder of this year and into 2027.

For now, the housing market appears to be balancing buyer caution with continued underlying demand. While higher mortgage rates and wider economic uncertainty are encouraging some people to take a more measured approach, new enquiries from prospective buyers are now at their highest since February. That should help sustain activity in the near term, with any movement in house prices likely to remain modest.

Meanwhile,, the energy giant Equinor has warned it may stop investing in the UK if new oil and gas fields at Rosebank and Jackdaw are not approved.

Anders Opedal, boss of the Norwegian state oil company which part-owns the sites, told the BBC:

The question will be: is the UK investable in the future? I hope it will not come to that.

He said the company would “have to take a hard view about it” if the UK government decides against new drilling.

It has to decide whether to give final approval to extract oil and gas at Rosebank and Jackdaw, despite a ban pledged in Labour’s election manifesto.

Opedal said he is confident that prime minister Andy Burnham’s talk of a “pragmatic approach to oil and gas” suggests both projects will get approved but he said the current limbo is “an uncomfortable position to be in”.

He said that the UK could produce more of its own oil and gas.

It’s a political choice. The North Sea oil and gas industry started on the UK side. We learned from the UK and it’s actually the same geology on both sides of the border – several fields actually cross it.

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

The global economy is under threat from the energy price shock, record public debt and the AI investment boom, according to the International Monetary Fund’s managing director Kristalina Georgieva.

In a speech ahead of the IMF and World Bank annual meetings in Bangkok next week, she said the world is being pulled in two directions – a negative energy supply shock from the Middle East war and a positive demand shock from artificial intelligence that is also driving inflation higher.

The combined impact of these two forces is highly uneven across the world,

she said, noting that the AI boom is bypassing many countries.

Growing government debt is another major worry. Georgieva singled out advanced economies, led by the United States, as the “worst offenders” on debt burdens, with debt to GDP ratios higher than in emerging markets and low-income countries.

Asian shares are down, while on Wall Street, the S&P 500 and the Nasdaq both finished at new all-time highs. The S&P 500 rose nearly 0.6% to 7,818.93 while the Nasdaq closed at 27,599.886.

MSCI’s broadest index of Asia-Pacific shares excluding Japan fell 0.3%. Japan’s Nikkei lost 0.6%, Hong Kong’s Hang Seng fell 0.5%, the Singapore market was down 1.3% and South Korea’s Kospi tumbled nearly 2%.

Oil prices have risen back above $100 a barrel again. Brent crude is up 0.66% at $101.19 a barrel, while US crude is 0.5% ahead at $89.86 a barrel.

Investors are weighing up supply constraints from a storm heading for North American oil-producing regions and Houthi attacks on Saudi Arabia, against higher supplies of oil from the Middle East

Around 12m barrels per day (bpd) of crude oil and 2m bpd of refined oil products have left the Middle East on tankers in the last seven to 10 days, according to commodities trading giant Vitol, Reuters reported.

After last week’s selloff in government bond markets, bonds rallied on Tuesday, pushing their yields (or interest rates) lower. Ten-year French yields fell more than 11 basis points and the spread between French and safer German bonds, which hit almost 160 basis points last week, narrowed to 132bps. The euro recovered from its declines over the past week and stabilised just above $1.1250.

ANZ economists said:

A sense of calm returned to European bond markets with French, Italian and Greek bonds outperforming amid a broad rally.

This morning, French 10-year yields rose nearly 5bps to 4.796%, while US Treasury yields rose 4.5bps, to 5.31%. UK gilt yields meanwhile are down a smidgen to 5.37%.

The Agenda

• 11.30am BST: UK Treasury gilt 2028 auction

• 7pm BST: US Federal Reserve minutes of last policy meeting