Bailey raises the Budget stakes

Good morning Square Mile watchers,

Andrew Bailey’s intervention overnight could make uneasy reading for John Healey. Weeks out from the Budget, the governor of the Bank of England said: “Whatever the stance of fiscal policy is, it must be credible and direct to that stability, and seen to be as such by markets.”

And this morning we’ve got that rarest thing: properly good news in London’s IPO market. Airtel Money will begin trading today on the London Stock Exchange, with shares priced at £1.96 apiece. That means the fintech firm is set for a £5.3bn valuation.

So, here’s everything you need to know this morning. We’ll be back in your inbox at noon with Midday Markets.

Matt

In an intervention on the relationship between monetary and fiscal policy, Bailey urged governments to consider the impacts of government spending and borrowing on inflation.

The Bank of England chief, who is also the chair of the global Financial Stability Board, said governments should take decisions that commit to both price and financial stability. 

He added that it was not for him to “comment on fiscal policy and thereby cross the line beyond central banking”. 

In remarks given at the Istanbul Economic Forum, the monetary authority chief also called on governments to exercise fiscal restraint.

Donald Trump has said the US has engaged in “productive discussions” with Iran and would refrain from attacking the country before the midterm elections, bringing relief to the oil market.

It’s taken the price of Brent crude back slightly, though it has remained around $103 per barrel after surging as much as 5.7 per cent on Thursday after Tehran intensified attacks on tankers navigating the Strait of Hormuz.

A successful flotation would open the door for a spot in the FTSE 100. Airtel previously said it expects to have a “free float that would make it eligible for inclusion” in the FTSE indices.

The London Stock Exchange has not managed to land an IPO north of £1bn since 2021, when Deliveroo and Wise each floated at valuations just shy of the £8bn mark. Deliveroo has since delisted following its takeover by US-based Doordash, meanwhile Wise has downgraded its listing after switching its primary venue to New York.

With Asos just the latest big British retailer to be the victim of a cyber hack, it’s time for the government to start incentivising businesses to up their security, writes Matt Warman.

Soul-crushing because the club is supposed to represent the very best of attacking rugby in a fusion of England internationals and overseas superstars. Baffling because it should never have got this bad, losing 48-0 to Gloucester last weekend without firing a shot.

But losing on the pitch is only ever surface-level, and it will be interesting to see how long Harlequins can be bad for before season ticket holders walk away, casual fans snub either of their two big matches at the 82,000-capacity Allianz Stadium and sponsors choose not to renew their deals.

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