Good morning. Today we're talking about the UK and US deepening ties, the Eurozone recession and a hedge fund exit.

Big Stories

UK and US draw closer

Rishi Sunak and Joe Biden have unveiled an agreement to strengthen economic ties between the UK and the US. The so-called ‘Atlantic Declaration’ was announced during Sunak's first trip to the White House as prime minister and aims to counter Russia, China and economic instability. However it falls short of the much longed-for free trade deal the UK government has wanted since Brexit. The agreement will allow British electric car firms to access the significant green tax credits and subsidies offered in America. British engineers and accountants should also find working in the US more straightforward as their qualifications are recognised. The leaders also agreed on a new civil nuclear partnership aimed at cutting dependence on Russian energy and supporting green energy cooperation.

Eurozone’s technical recession

New data showed that the Eurozone economy shrank by 0.1% last quarter, marking the second straight quarter of decline, and thus a recession (at least the textbook definition of one). GDPs were largely dragged down by reduced household spending in the face of cost of living crises. The 20-nation bloc was also hampered by Germany – the largest economy – which suffered a significant slowdown in factory output in March, as well as a drop off in government spending. Despite the contraction economists say they expect the region will return to growth soon with inflation cooling as energy prices fall which should boost consumer spending.

Hedge fund exit

Crispin Odey, Britain’s most well-known hedge fund manager, has been sacked by Odey Asset Management, the firm he founded, after a series of sexual harassment allegations. In 2021 Odey was acquitted of assault charges dating back more than two decades but the story returned to the headlines when 13 women came forward in a Financial Times article accusing Odey of sexual harassment or assault. Mr Odey, a prominent Brexit backer, claimed to have made hundreds of millions of pounds as sterling plummeted in the aftermath of the referendum vote. According to reports the hedge fund plans to change its name to distance itself from its founder while some investors have pulled money from the firm.

Elsewhere...

Tax rewind: The windfall tax on oil and gas firms will be scrapped if prices fall to normal levels for a sustained period, the government has announced.

Mortgage woes: HSBC has temporarily withdrawn mortgage deals for new borrowers due to a surge in demand ahead of expected rate rises.

AI get together: The government has announced that the UK will host the first ever global AI summit this autumn.

Back to the office: Google plans to crack down on employees who haven’t been coming into its offices consistently as it changes its remote working policy.

Crackdown effects: The Netflix crackdown on password sharing is in its early days in the US, but it appears to be boosting to its subscriber base.

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