Business

UK Economy Stagnates in Q3 Amid Growing Recession Fears

Published

1 year ago

December 23, 2024

RTX

The UK economy recorded zero growth in the third quarter of 2024, reflecting a marked slowdown from the 0.4% growth seen in the previous quarter, according to revised figures from the Office for National Statistics (ONS). The flatlining gross domestic product (GDP) figure, which fell short of analyst expectations of 0.1%, underscores mounting economic challenges as businesses and households face heightened uncertainty.

Key Factors Behind the Stagnation

The lack of growth in the services sector, particularly in the insurance and financial industries, weighed heavily on the economy. The production sector also contracted by 0.4%, largely due to a decline in gas, electricity, air conditioning, and steam supply.

Alpesh Paleja, interim deputy chief economist at the Confederation of British Industry (CBI), attributed the stagnation to a challenging business environment. “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds,” Paleja said. “Firms expect to reduce both output and hiring, and price growth expectations are getting firmer.”

Businesses have voiced concerns over policy changes introduced by the Labour government following its election in July, including higher employer national insurance contributions (NICs) announced in the Autumn Budget. These measures have reportedly led many companies to reassess their budgets as the new year approaches.

Mixed Sector Performance

While exports declined by 0.5% and imports fell by 2.5%, a slight rise in net trade helped offset some losses. Construction activity showed modest improvement, though it fell short of expectations.

Household spending remained unchanged from the previous quarter at 0.5%, as consumers grew cautious with festive expenses on the horizon. Meanwhile, business investment provided a rare bright spot, rising by 1.9% compared to 1.2% in the previous quarter.

Government consumption rose at a slower pace than anticipated, further reflecting the tepid economic environment.

Outlook for 2025

Paleja called on the government to take decisive action to restore business confidence and encourage investment. “As we head into 2025, firms are looking to the government to boost confidence and give them a reason to invest,” he said, highlighting the need for reforms in areas like the apprenticeship levy, business rates, and occupational health incentives.

Geopolitical uncertainties, including the Russia-Ukraine and Israel-Palestine conflicts, along with escalating trade tensions involving China, are expected to add further pressure on businesses in 2025. Analysts warn that without significant government intervention—such as tax breaks and innovation incentives—the UK risks prolonged stagnation.

The Labour government faces increasing pressure to chart a clear industrial strategy that fosters stability and growth, providing much-needed support for both businesses and households as the economy heads into the new year.

Business

Airbus-Led Consortium Proposes New Fighter Jet Plan After Collapse of Franco-German FCAS Project

Published

13 hours ago

June 9, 2026

Web Reporter

A new Airbus-led consortium has put forward an alternative plan to develop a next-generation fighter jet following the collapse of the Franco-German Future Combat Air System (FCAS) programme, marking a significant shift in Europe’s defence cooperation efforts.

The proposal, confirmed by one of the participating companies to AFP on Tuesday, comes just a day after German Chancellor Friedrich Merz and French President Emmanuel Macron agreed to end the long-running FCAS initiative after years of disagreement between industrial partners.

Munich-based defence electronics firm Hensoldt said it has joined Airbus Defence and Space, along with Autoflug, Diehl Defence, Rohde & Schwarz, Liebherr, missile manufacturer MBDA and engine maker MTU Aero Engines, in preparing a new framework for a next-generation combat aircraft.

The group has submitted its position paper to German Defence Minister Boris Pistorius, with reports indicating that it has also been sent to the Chancellor’s office in Berlin. According to the companies involved, the document outlines a revised approach to both the Future Combat Air System and its associated Next Generation Weapon System.

The German defence ministry confirmed receipt of the proposal and said discussions are ongoing. Pistorius noted that the government is still evaluating possible directions for the programme, adding that consultations with stakeholders have been taking place for months.

He described the end of the original FCAS project as personally disappointing, acknowledging the importance of Franco-German defence cooperation within Europe. However, he said strategic decisions must be made based on current realities rather than political sentiment.

The FCAS programme had been widely regarded as one of Europe’s most ambitious defence initiatives, designed to strengthen military integration amid growing security concerns linked to Russia’s actions and evolving transatlantic relations. The project aimed to deliver a sixth-generation fighter jet system through joint European development.

Despite its strategic importance, FCAS was repeatedly delayed due to disagreements between France’s Dassault Aviation and Airbus, which leads the German and Spanish participation in the programme. Tensions centred on industrial leadership, design authority and control over key technologies.

German partners had resisted Dassault’s push for greater control over aircraft development, while policy differences also emerged over operational requirements. German officials, including Friedrich Merz, have previously argued that Germany does not require carrier-based aircraft or nuclear-capable fighter systems, unlike France.

The breakdown of the programme has raised concerns about Europe’s ability to coordinate large-scale defence projects, even as governments seek to strengthen military capacity in response to global security challenges.

Further details of the Airbus-led alternative proposal are expected to be presented later this week at the Berlin ILA Air Show, where industry leaders and government officials are set to discuss the future of European combat aviation.

Business

OpenAI Moves Toward Potential IPO as AI Race Intensifies on Wall Street

Published

13 hours ago

June 9, 2026

Web Reporter

OpenAI, the company behind ChatGPT, has taken a significant step toward a possible stock market listing after filing confidential preliminary paperwork with the US Securities and Exchange Commission, signalling its intent to explore becoming a publicly traded company.

The San Francisco-based artificial intelligence firm confirmed the filing on Monday, marking another milestone in its gradual transition toward public markets and placing it alongside other major technology players preparing for potential listings.

Chief executive Sam Altman had previously indicated that an initial public offering would likely be the company’s “most likely path,” citing the enormous capital requirements needed to develop advanced artificial intelligence systems at scale.

Founded in 2015 as a non-profit focused on building safe and broadly beneficial artificial intelligence, OpenAI has since evolved into a corporate structure valued at about $852 billion. Its rapid commercial expansion has been driven largely by the global adoption of ChatGPT and related AI tools.

The latest filing comes as the company navigates intensifying competition from rivals including Google and Anthropic, both of which are investing heavily in large-scale AI models. Analysts have noted that the race for computing power and infrastructure has placed significant financial pressure on leading firms in the sector.

Industry analyst Nate Elliott described the timing as challenging, noting that OpenAI faces rising competitive pressure while still requiring substantial funding to support its operations. He added that public markets may represent one of the few viable sources of capital at the scale the company needs.

OpenAI has already undergone major structural changes, including a transition to a public benefit corporation while remaining under the oversight of its non-profit parent organisation. The restructuring was widely seen as a step toward eventual public listing.

The company also recently resolved a legal dispute involving co-founder Elon Musk, who had challenged OpenAI’s shift toward a for-profit model. A federal jury dismissed the case, clearing a major legal obstacle for the company’s corporate direction.

OpenAI has not disclosed revenue figures or provided a timeline for profitability, but continues to invest heavily in data centres, research and model training. Like several leading AI firms, it remains unprofitable as it prioritises expansion in a rapidly evolving sector.

In a statement, the company said the filing was not tied to an immediate listing decision and that timing remains flexible. It noted that remaining private still offers operational advantages, although public markets could become preferable depending on future conditions.

Chief financial officer Sarah Friar has previously said the company is preparing as though it will eventually be listed, highlighting that public markets offer significantly greater access to capital compared with private funding sources.

OpenAI chief executive Sam Altman has also outlined long-term ambitions that include developing automated AI research systems and expanding access to advanced AI capabilities globally. He said the company aims to ensure that economic gains from artificial intelligence are broadly distributed as the technology continues to advance.

Business

SpaceX Set for Historic IPO as Europe Opens Rare Door to Retail Investors

Published

13 hours ago

June 9, 2026

Web Reporter

SpaceX is set to make its long-awaited stock market debut on Friday in what analysts say could become the largest initial public offering in history, with retail investors in Europe unusually given direct access to shares.

The company, founded by Elon Musk and known for its rockets, satellites and artificial intelligence ventures, is expected to list under the ticker symbol SPCX. The IPO, scheduled for 12 June, is projected to price shares at around $135 each, placing SpaceX’s valuation at approximately $1.75 trillion and raising about $75 billion in new capital.

Unlike most major listings, where institutional investors dominate allocations, SpaceX has reserved a significant portion of shares for individual investors. Up to 30 percent of the total offering is expected to be available to retail buyers, marking a major shift in IPO distribution practices.

According to the company’s prospectus, around 55.6 million newly issued Class A shares have been set aside for retail investors across seven European countries, including Germany, France, the Netherlands, Denmark, Norway, Spain and Sweden. Regulatory approval has already been granted in Germany by the Federal Financial Supervisory Authority, although it stressed the decision does not represent an endorsement of the company or its valuation.

In the United Kingdom, access will also be available through selected platforms, with broker networks including AJ Bell, CMC Markets, eToro, Freetrade, Interactive Brokers and Interactive Investor participating via Marex Financial’s public offer system.

Retail investors will be able to apply through fintech platforms such as Revolut, Hargreaves Lansdown and eToro, although minimum investment requirements vary. Some platforms have set entry levels starting at around $750, while others require higher thresholds in local currency.

Interest among European investors has reportedly been strong. Hargreaves Lansdown said tens of thousands of clients had already registered for IPO alerts since rumours of the listing emerged earlier this year. Market data from BNP Paribas indicates retail participation in large technology IPOs has been steadily rising, now accounting for as much as 30 percent of order books in some cases.

However, analysts and financial institutions have urged caution. Allocation is not guaranteed even for those who apply, with final share distribution expected on the day of listing. Early investors may also face restrictions on selling shares quickly, as brokers often penalise rapid “flipping” of IPO stock.

Volatility is expected in the early days of trading, particularly as institutions and retail investors react to the company’s high valuation. Currency fluctuations may also affect returns for European investors buying dollar-denominated shares.

Professor Meziane Lasfer of Bayes Business School said retail investors may face disadvantages compared with institutional funds, which have access to deeper financial analysis. He also pointed to SpaceX’s reported $4.94 billion loss in 2025 despite strong revenue growth, noting that profitability remains uncertain.

Some institutional investors have already opted out. Denmark’s AkademikerPension, which manages around $25 billion in assets, said it would not participate, citing concerns over valuation and governance structure, which gives Elon Musk significant voting control.

SpaceX itself has acknowledged in its regulatory filings that profitability is not expected in the near term, adding further debate around the long-term outlook for one of the most closely watched listings in global markets.