Inflation at 3.5% as Musk floats a SpaceX–Tesla merger

A week before the Budget

British inflation rose to 3.5%, higher than expected, according to Sky News. The Guardian linked the rise to fuel prices driven up by conflict in the Middle East. It called the release a double blow to Healey, because the monthly deficit hit £24bn on the same morning. The BBC reported that inflation and government borrowing were both at their highest for a year, with the Budget due next week.

At the BBC, Faisal Islam wrote that the two sets of figures illustrate the chancellor's Budget challenge. CNBC said the inflation number cemented expectations of a rate rise. Those expectations were already firm. On Tuesday evening This is Money reported that markets were betting on rates reaching 4% in November and 5% by the end of next year, after a shock fall in unemployment.

Two BBC pieces put the numbers in other terms. One carried the words of a pensioner: 'I can't afford to heat my home on my pension'. The other examined the 'trillion pound' oil fund the government believes Britain could have built.

Fiscal choices were also in view. This is Money reported that fear of Trump's tariffs was deterring Labour from a rates shake-up, one that would help hotels and hit online giants such as Amazon. The Guardian, separately, reported that bereaved civil service families could face what it called 'unjust' tax bills because of delays in the pension scheme.

Musk floats a merger

Elon Musk dominated the American evening. The Wall Street Journal reported that SpaceX and Tesla are considering a merger. Euronews said Musk backs the combination as the rocket company turns a profit.

Tesla's own numbers drew two descriptions. The Guardian said the carmaker beat earnings projections after Musk floated the merger plan. The Journal's live coverage put it differently: Tesla's profit fell, with batteries proving a barrier to growth. The two accounts do not exclude each other. A profit can fall and still exceed forecasts.

SpaceX's results reached beyond Musk's own companies. The Journal reported that US stocks rose as SpaceX earnings boosted the AI trade. The BBC asked why Musk is plotting what it called a mega-merger of the two businesses.

Not every American release was received so warmly. Euronews reported that Netflix shares dropped on slowing engagement and revenue growth. The Journal reported that Larry Ellison went on a borrowing spree to bankroll his son's bid for Warner Bros. It also found the New York Stock Exchange being trounced in the battle for Wall Street's biggest listings.

In This is Money, Alex Brummer wrote that stock market tremors are starting to be felt as tech shares tumble, and asked what would trigger an earthquake.

Oil higher, Hong Kong lower

Thursday opened with oil higher. City A.M. said London stocks were set to drop after a drone attack in Saudi Arabia. Gold went the other way. The Journal reported it falling, weighed by rising energy costs and uncertainty over the Federal Reserve.

That uncertainty has a housing angle. CNBC reported that American housing is flashing warning signs just as the Fed weighs more interest rate hikes.

In Asia, the Nikkei edged higher, with Wall Street's gains offsetting worries about the Middle East. Hong Kong fared worse. The South China Morning Post said stocks there were heading for a four-month low as the chance of strong stimulus from Beijing shrinks. A companion piece observed that China's stabilisation pledge did not lift stocks, and asked why investors were nonetheless praising it. The same paper reported last-minute IPO cancellations in Hong Kong amid increased regulatory checks and a weak market.

Canada unveiled a $6.2bn plan to shield manufacturers as Trump's trade tariffs bite.

London's corporate pages were mixed. This is Money reported that the owner of National Express eyes a takeover by its Spanish shareholder, calling it a fresh blow to the City. Sky News said the online gambling group BetGoodwin is weighing an £80m London float. Halfords shares hit a speedbump despite accelerating sales, according to City A.M., which also asked who might be a sizeable suitor for Weil as it eyes a merger. Me+Em revealed bumper profits and plotted a US expansion.