Wall Street has opened higher, and European shares are also pushing higher, reversing earlier declines, ahead of first-quarter results from the US chipmaker Nvidia, the world’s most valuable company that has been at the centre of the AI booom.

It is due to report its results at 1:20 p.m. PT (9:20 p.m. BST). Expectations are “sky high” as one analyst put it.

The Dow Jones is 0.5% ahead, the S&P 500 rose 0.6% and the Nasdaq Composite gained 0.4%.

In London, the FTSE 100 index has gained 66 points, or 0.6%, to 10,395. The German Dax is 0.5% ahead, France’s CAC climbed 0.7% and Italy’s FTSE MiB jumped 1.5%.

Our main stories:

Thank you for reading. We’ll be back tomorrow. Take care – JK

UK supermarkets have been asked by the government to consider freezing the prices of some essential foodstuffs to protect the public from inflation fuelled by the Middle East conflict.

They would be incentivised to make the move in exchange for the relaxation of some regulations such as easing restrictions on packaging and a possible postponing of changes to the rules around healthy food.

Retailers rejected the plan, criticising its potential cost amid rising taxes, fuel and energy costs and arguing it could push up prices for shoppers overall.

One supermarket executive called the idea “completely mad”. Another said: “This is an unnecessary, unwanted and unjustified intervention in the market.”

Speaking about potential price controls in front of the Treasury committee, Andrew Bailey, the governor of the Bank of England, said:

The question you have to think through is: are you doing this for some very well grounded, very temporary reason? I think if you start doing it as a matter of course then you are artificially moving prices relative to costs and that’s not a sustainable thing in the long run. There may be reasons for doing it in the short run, but it does need to be thought through.

Swati Dhingra, an external member of the monetary policy committee, said:

Thinking about where to find these sources of supply when you have a crisis is really key and that is one thing we can think about doing, a lot of our food is imported which many other countries don’t face as a problem. On the specific point about price controls, lots of countries have tried it, not necessarily successfully, and the biggest problem with these sorts of controls is you are dampening precisely the price signal you want people to react to, so as a market economy you can that for a little bit but how long do you want it to go on for?

I grew up with price controls on food all my life [in India] and that story to some degree was very successful in being able to cure famine and poverty but at the same time what it’s ended up creating is a highly distorted agricultural sector in India, so in that sense, do it with a lot of caution and a lot of thinking behind what it’s trying to target.

The UK government has ruled out mandatory supermarket price caps today, but said it is in talks with the sector on ways to ease cost of living pressures, with food prices likely to head higher in coming months because of fertiliser and energy shortages caused by the Iran war.

Marks & Spencer boss Stuart Machin described the idea as “completely prepostorous”.

It emerged on Tuesday that government officials had raised the idea with supermarkets that they should stock at least one version of basic items such as bread, milk and butter at a set low price in exchange for an easing of some regulations on issues such as packaging and healthy food.

Keir Starmer has announced an extension to the temporary 5p cut in fuel duty, as widely expected, telling the Commons it was a necessary response to cost-of-living pressures.

Before a wider package of measures due to be announced by Rachel Reeves, the chancellor, on Thursday, Starmer used prime minister’s questions to announce the extended freeze and a vehicle tax break for the haulage industry.

At the last budget, Reeves announced she would freeze fuel duty for nine months but that she would end a temporary 5p cut, first announced by Rishi Sunak in 2022 after Russia’s full-scale invasion of Ukraine, beginning in September.

However, the Resolution Foundation said the move will benefit richer households just as low-income families find themselves at the heart of a cost of living crunch.

Jonny Marshall, principal economist at the think tank, said:

The best that can be said of today’s announcement is that the chancellor has wisely ignored calls for an expensive blanket cancellation of the temporary 5p cut to fuel duty.

Nonetheless, even this modest extension will cost £210m this year. That money could be better spent elsewhere, not least as the real cost of petrol is still lower today than it was pre-Covid.

Come the autumn, low-income families – who are still £1,800 poorer than they were before the last energy price shock – will be worst affected by another round of rising food prices and energy bills. And yet the support announced today will primarily benefit those who are better off, with the richest fifth of households gaining more than twice as much as the poorest fifth.

Over the past 15 years, successive hancellors have backed off implementing already budgeted for fuel duty rises – the total cost of which has grown to £120bn. The Chancellor must ensure that this extension doesn’t make that fiscal fiction even worse.

The “sick note” system will be overhauled, with government trials aiming to reduce the number of benefit claimants who are signed off work because of poor health.

Four pilots, in different areas, in England will look at the best way to end this “tick-box exercise” which does not offer any support or guidance, and replace it with personalised ‘stay in work’ and ‘return to work’ plans for workers who fall ill, according to the Department for Work and Pensions, in news first reported by the Times and the Financial Times.

The DWP said in the pilots, some GPs will issue the first fit note in a sickness absence while in other areas, fit notes will be replaced by the new plans.

Some 11m “fit notes” (which used to be called sick notes) are issued every year, and more than nine in 10 declare the person “not fit for work”.

The £3m trials will run from July.

• Birmingham and Solihull – GPs issue the first fit note where needed, with all patients referred to a new support service led primarily by non-clinical staff, including social prescribers and work and health coaches

• Coventry and Warwickshire – GPs issue the first fit note, with patients able to be referred to a support service made up of both clinical and non-clinical staff

• Cornwall and the Isles of Scilly – GPs refer patients directly to a non-clinical support service, without issuing a fit note

• Lancashire and South Cumbria – GPs refer patients to a support service made up of both clinical and non-clinical staff, without issuing a fit note.

John Foster, chief policy & campaigns officer at Confederation of British Industry, said:

The fit note system is broken and fails employers, workers, and the economy. Business welcomes these pilots. They are an important step towards building a better system.

Three supertankers carrying crude oil to Asia have attempted to pass through the strait of Hormuz today, a couple of days after Iran announced a new authority to oversee shipping through the waterway.

Two ships are carrying Iraqi crude to China while a third is transporting Kuwaiti oil to South Korea, the Financial Times reported, citing shipping data.

Together the three ships are carrying 6m barrels of oil, potentially the largest amount to exit the Gulf in a single day since the US and Israel started launching missile attacks on Iran on 28 February.

The ships went through the northern side of the strait, following a route designated by Iran. “It is most likely that there was a deal done,” with Tehran, Matthew Wright, lead shipping analyst at data company Kpler, told the FT.

The news came after Iran threatened to spread war beyond the Middle East if the US attacks again, after Donald Trump said he had come within an hour of restarting the military campaign.

Iran submitted a new proposal to end the war to the US this week, but the terms appear to be the same as those previously rejected by Trump, including demands for control of the strait of Hormuz compensation for war damage, lifting of sanctions, release of frozen assets and the withdrawal of US troops from the area.

Wall Street futures have climbed, with chip stocks rebounding ahead of results from Nvidia, the world’s most valuable company at the centre of the global AI boom.

Brent crude has fallen more than 2% to below $110 a barrel on hopes for the latest negotiations between the US and Iran, while investors remain cautious.

“All eyes on Nvidia,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

Expectations are, of course, sky high. The company is expected to report around $79bn in revenue – roughly 15% higher than last quarter and nearly 80% above the same quarter last year.

Margins are also expected to remain exceptionally strong, around 75%, confirming that Nvidia still enjoys enormous pricing power despite the massive Blackwell ramp and rising competition.

But Nvidia’s earnings no longer carry the same existential weight they did at the very beginning of the AI craze. Back then, markets were obsessed with training AI models. GPUs became essential because they are incredibly efficient at handling thousands of calculations simultaneously — exactly what AI training requires. Imagine trying to get from point A to B by simultaneously testing millions of possible paths through C, D, F, X, Y or Z. GPUs are built for that kind of parallel processing power. CPUs, on the other hand, are designed for sequential computations.

As such, once the models are trained with GPUs, the focus increasingly shifts toward inference — running the trained model — where TPUs and CPUs can also play a major role, while memory chips are needed to store and process information efficiently.

That’s why GPUs say more about the raw power and evolution of AI models, while CPUs and memory chips increasingly say more about real-world AI adoption and scaling. This growing importance of CPUs and memory infrastructure is also why traditional CPU and memory chip makers have taken over part of the AI narrative — and why Nvidia is developing its own CPU technologies within its next-generation Vera Rubin platform.

Investors will therefore closely watch whether the company can maintain strong margins while scaling production and preparing the transition toward the next-generation Vera Rubin platform — designed for the next phase of AI focused on massive-scale inference, reasoning and AI “factories.”

And the competition for running models efficiently at lower cost is fierce. Besides traditional chipmakers like AMD and Intel, Nvidia’s biggest clients — Big Tech companies like Amazon, Google and Meta — are all working on their own in-house chips to build the most energy- and cost-efficient alternatives to Nvidia’s ultra-powerful premium products.

UK government borrowing costs continue to ease, with yields on short-dated gilts – as UK government bonds are known- falling by 11 basis points.

The yield, or interest rate, on three-and four-year bonds dropped 11bps to 4.46% and 4.48% respectively, while the yield on five-year bonds fell 10bps to 4.55%.

The 10-year yield, the UK benchmark, dropped 9bps to 5% and the 30-year yield hit 5.7%, down 8bps.

Money markets are now pricing in just over 50 basis points of interest rate increases from the Bank of England (effectively two quarter-point hikes) by December, compared with 60bps on Tuesday.

In the last two weeks, bond yields rose sharply as traders priced in Bank of England rate hikes and braced for a the potential departure of prime minister Keir Starmer, with the leftwing mayor of Greater Manchester Andy Burnham seen as the main challenger – which could lead to higher spending. Burnham has said, though, that he would stick to the fiscal rules.

UK house prices were flat in March while private rents rose at a slightly faster rate in April, according to official figures.

The average price of a home was unchanged at £268,000 in March, compared with an annual increase of 1.7% in February, according to the Office for National Statistics.

This was because prices fell by 0.4% between February and March, compared with a large monthly increase of 1.2% a year earlier, ahead of the expiry of a stamp duty tax break that meant people were rushing to complete their house purchases.

House prices fell 0.6% year on year to £290,000 in England, and increased 2.9% to £213,000 in Wales and were up 1.6% £187,000 in Scotland.

Private rents rose by 3.5%, to an average of £1,381 in April, up from 3.4%.

• Average rents increased to £1,438 (3.5%) in England, £834 (4.9%) in Wales, and £1,019 (2.0%) in Scotland, in the 12 months to April.

• In Northern Ireland, average rents increased to £877 (4.0%), in the 12 months to February.

• In England, private rents annual inflation was highest in the North East (6.5%), and lowest in London (2.0%), in the 12 months to April.

Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said:

Rents are holding firm, and we don’t see that changing any time soon. The reason is simple: stock levels remain extremely low while the number of applicants for each available property stays high. Until that supply and demand imbalance shifts meaningfully, landlords have little pressure to move on price.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said:

Inflation softening to 2.8% as a result of lower utility bills is welcome but the ongoing conflict in the Middle East means the inflationary threat has not rescinded.

While further interest rate cuts seem unlikely for now, perhaps the need to increase them has reduced, particularly in light of the weaker economy and rising unemployment. This will come as a relief for borrowers already grappling with higher living costs.

As lenders continue to tweak their mortgage rates downwards on the back of lower swap rates, this will assist those buyers who are pressing on with their plans regardless of wider geopolitical concerns.

The cost of the government’s £38bn nuclear plant in Suffolk is subject to “significant uncertainty” and may outweigh the benefits for UK households until at least 2064, according to the government’s spending watchdog.

The National Audit Office (NAO) has warned that although the potential benefits of the Sizewell C nuclear plant are considerable, they remain uncertain. The risks, however, are “immediate, substantial and borne by the public”.

The government claims the nuclear reactor, expected to generate the equivalent of enough low-carbon electricity to power 6m homes when it begins operations in the late 2030s, could save £2bn a year from the electricity system compared with using other low-carbon technologies.

However, for households the overall savings could be outstripped by the cost of supporting its construction until almost halfway through its 60-year operational life. The project could take even longer to “break even” if there are cost overruns or delays, the NAO warned.

English wines won the highest percentage of gold medals per entry in a global competition, with experts describing the improvement as remarkable.

At the International Wine Challenge, English wines are winning more gold medals than ever. In 2025, the country won 10, but this year it was awarded 25.

Sam Caporn, a master of wine, said:

I think there are a number of reasons why England did so well this year. One of them is that for many of the top producers, the vines are getting older which leads to greater quality; Nyetimber’s first vintage for example was in 1992 so actually over 30 years ago now.

She added that the wines were being matured for longer:

There is also the possibility of increased bottle age – Wiston for example, won a trophy for their Cuvee 2009 Magnum and reserve wines are also taking on more complexity with every year that goes by.

As the climate changes, vineyards, particularly in the south of England, can expect more sunny days and warmer weather. However, extreme weather including drought can often have the adverse effect in threatening food crops.

Stamp duty should be scrapped and replaced with a new property wealth tax to fix London’s housing crisis, a leading thinktank has proposed.

A report on the capital’s property market suggests an annual tax to replace the levy paid when buying a property and council tax would encourage downsizing and raise funds for social housing. It would also help renters to save a house deposit.

The research, by the Centre for London, highlighted disparities in space between the poorest and wealthiest homeowners. It found average floor space for each person rose by almost 30% between 2004 and 2023, but this additional space went disproportionately to higher-income owner-occupiers.

Households in the top 20% of incomes have seen a 27% rise in space owned, whereas the bottom 40% had a rise of 6%. This means that, despite London having more housing available to use for each person than 20 years ago, housing inequality has widened.

UK government bond yields have fallen after the inflation figures.

The yield, or interest rate, on the benchmark 10-year gilt is down 4 basis points to 5.07% while the 30-year yield dropped 4bps to 5.7%.

These are bigger moves than for German, Italian and France government bonds. Germany’s 10-year yield, the benchmark for the eurozone, dipped 1 basis point to 3.17%, after rising to 3.2% on Tuesday, the highest in 15 years.

Investors still worry that war-driven inflation will force central banks to raise interest rates. Markets are pricing in two rate hikes from the Bank of England this year (with no change expected at the June meeting), and at least two rate rises from the European Central Bank.

European shares have edged lower, as investors remain cautious and keep a close watch on negotiations between the US and Iran. Donald Trump said on Tuesday that the war would be over “very quickly,” while vice president JD Vance talked up progress in talks with Tehran.

The pan-European Stoxx 60 index dipped 0.1%. Germany’s Dax and France’s CAC were slightly lower while the UK’s FTSE 100 index lost 42 points, or 0.4%, to 10,288.

Brent crude, the global oil benchmark, slipped 1% to $110.13 a barrel.

The European Union struck a provisional agreement to remove import duties on US goods, as part of a trade deal struck with Washington last July – before Trump’s 4 July deadline when he has threatened to hike tariffs (again) if the deal is not implemented.

James Smith, developed markets economist at ING, said:

Yes, UK inflation is set to rise again later this year, having dipped below 3% in April. But the data should reassure the Bank of England that last year’s food price spike hasn’t triggered a wave of second-round effects across the inflation basket. Like yesterday’s jobs numbers, the data questions the need for aggressive rate hikes.

We continue to think markets are overestimating the Bank of England’s willingness to tighten policy, at current levels of energy prices. Investors are pricing between two and three rate rises by next spring.

The fear of the hawks last year was that the rise in food inflation – a very visible trend to consumers – together with big payroll tax and minimum wage hikes, would manifest in a more persistent bout of inflation. So far, there’s not much evidence that’s happening.

That should provide some reassurance that the impending energy shock is unlikely to spark a wave of “second round effects”, or at least not nearly as pronounced as four years ago.

Currently, we think the Bank is somewhere between zero and one hike(s), with officials arguing that the mere fact they aren’t cutting rates (as was previously likely this year) amounts to de facto tightening.

That said, after April’s BoE meeting, we narrowly shifted our call for a prolonged hold to a one-and-done rate hike in June. That is now in serious doubt, though clearly a lot can still happen in the Middle East between now and then. And we suspect if there’s no big improvement in energy flows by mid-June, officials might still be tempted to raise rates. We’re open-minded; it’s just as conceivable that the Bank could play for more time.

Motor fuels inflation was the highest since September 2022, the ONS said. The average price of petrol rose by 16.6 pence a litre between March and April, compared with a fall of 3p a litre a year earlier. The average petrol price was 156.8p a litre, the highest since November 2022 when it was 163.6p a litre because of the war in Ukraine.

Diesel prices jumped by 31.3p a litre in April against a fall of 3.1p a year earlier. The average price was 190p a litre, the highest since July 2022 when it was 17.9p a litre.

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

It’s inflation day! (and Nvidia day)

UK inflation slowed more than expected last month, led by lower electricity and gas prices.

The annual inflation rate fell to 2.8% in April from 3.3% the month before, according to the Office for National Statistics. Economists had expected a reading of 3%. The decline was largely because of big increases in utility bills and other regulated prices in April last year, whereas the energy price cap was lower this year.

Core inflation, stripping out volatile food and energy costs, fell to 2.5% from 3.1%.

Food inflation also slowed, to 3% from 3.7%, led by meat, sugar and chocolate, oil, coffee and tea, and soft drinks.

Grant Fitzner, chief economist at the statistics office, said:

There was a notable fall in annual inflation led by lower electricity and gas prices. This was due to the government’s energy bill support package reducing variable and fixed tariffs, along with lower global wholesale energy prices before the conflict in the Middle East, which fed through to the reduction in the Ofgem cap.

However, the energy price shock caused by the Iran war will drive inflation sharply higher in coming months, with the Bank of England forecasting that it could hit 6.2% early next year under its worst scenario.

The UK chancellor, Rachel Reeves, said:

The war in Iran is not our war but one we will need to respond to, and the decisions I took in the budget last year have kept inflation down as we deal with global instability. We have the right economic plan, and to change course now would risk our economic stability and leave working people worse off.

We have already taken £117 off energy bills, frozen rail fares, and lifted the two-child limit, and over today and tomorrow I’ll set out the next phase of how we will support UK households.

Reeves is due to announce more measures to reduce the cost of living on Thursday, including a cancellation of a fuel duty increase which is due to take effect in September.

Today, she is expected to unveil sweeping reforms, giving parliament the authority to approve critical energy and infrastructure projects, and better protect them from judicial reviews.

A Treasury spokesperson said:

For too long, vital infrastructure delivery has been delayed by judicial reviews of projects.

She [Reeves] is clear that parliament must take back control to get Britain building the power plants, wind farms and grid connections that will bring bills down, strengthen our energy security, and deliver growth in every part of our country.

Asian stocks fell, extending a losing streak, as inflation fears hammered bonds. Investors are awaiting quarterly results from Nvidia, the world’s most valuable company, later today.

Japan’s Nikkei dropped 1.5%, while South Korea’s Kospi lost 1.6%. Hong Kong’s Hang Seng index slipped 0.67% and China’s CSI300 was flat.

The Agenda

• 9.30am BST: UK House prices and rents

• 10am BST: Eurozone inflation (final)

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