British inflation defied forecasts for a slight fall and held at 2% in June while strong underlying price pressures prompted investors to reduce bets that the Bank of England will cut interest rates in two weeks' time for the first time since 2020, Reuters reported. Increases in hotel prices - in a month when U.S. pop star Taylor Swift and other performers toured the UK - were partly to blame for the higher-than-expected inflation number, underscoring the BoE's concern about services prices.

The last time a freshly minted Labour government unabashedly campaigned on an ambitious national industrial policy to revive the British economy was 50 years ago, and the results were generally viewed as disastrous, the New York Times reported. The 1974 program of subsidies, state ownership and power sharing among business, unions and government resulted in strikes that paralyzed the nation. And the government’s goal of picking industrial winners turned into a policy of backing losers like the automaker British Leyland and British Steel Corporation.

One of Thames Water Ltd.’s key bondholders says a turnaround of the company envisioned by the government regulator has raised the likelihood of significant losses on its top-ranked securities, Bloomberg News reported. Luke Hickmore, investment director at Abrdn Investment Management Ltd., said it will be harder for the UK’s biggest water and sewage company to attract a new buyer without imposing losses on creditors. He believes the chances of a 15%-20% loss on the Class A bonds, which make up most of Thames Water’s debt, has gone up.

UK energy services company Petrofac Ltd is running out of time to agree a debt deal with creditors, after months of talks have failed to produce a definitive agreement, Bloomberg News reported. The London-based firm missed a bond payment in May and has until July 25 to find a solution with creditors. Failure to do so could lead to an extension of the deadline, or force the company to immediately repay debt.

The UK’s biggest water and sewage company could be broken up, listed on the stock exchange, or forced to cap its debt under special measures set out by the regulator on Thursday, Bloomberg News reported. Heavily-indebted Thames Water will be put into a Turnaround Oversight Regime to ensure it can fix chronic leaks and sewage spills, according to the draft ruling. Ofwat also limited the amount Thames can hike annual customer bills to £535 ($688) per household, in line with the average increase for the industry. But it’s well below the £627 proposed by Thames.

Britain's economy grew more quickly than expected in May, providing some momentum for the new government of Prime Minister Keir Starmer but adding to doubts about whether the Bank of England will cut interest rates next month, Reuters reported. Economic output increased by 0.4% in May, after zero growth in April, the Office for National Statistics said. A Reuters poll of economists had pointed to a 0.2% monthly increase. The strength of the upturn could dissuade the BoE from beginning to cut interest rates as soon as Aug. 1, its next scheduled monetary policy announcement date.

Britain’s biggest developers are increasingly turning to a costly service to try to sidestep delays in the country’s broken planning system, a trend that underlines the extent of the challenge awaiting the new Labour government as it looks to make reforms, Bloomberg News reported. Freedom of Information requests by Bloomberg to councils across the UK show that builders are using a tool called planning performance agreements more and more to get their proposals looked at.

The future of Thames Water hangs on a decision this week by the industry regulator, coming after Britain’s largest water company admitted it only has enough cash to fund operations for less than a year, Bloomberg News reported. Ofwat will rule Thursday on Thames Water’s £20 billion ($25.6 billion) business plan — a five-year overhaul of crumbling infrastructure that requires a sharp increase in customer bills. If the watchdog rejects the proposal, the heavily-indebted utility may be unable to raise the funding it needs to stay afloat.

Begbies Traynor has warned that insolvency activity will remain “elevated” into 2025 despite improvement in the wider economy, PA Media reported. The Manchester-based restructuring firm said that higher interest rates and funding challenges in certain sectors will result in further companies going bust or requiring an overhaul. The company, listed on London’s AIM junior market, reported strong revenue and earnings growth over the past year. Group revenues increased by 12% to £136.7 million for the year to April 30.

Bank of England policy maker Jonathan Haskel signaled that he will vote to leave interest rates at a 16-year high in his final meeting next month, warning that a “tight and impaired” labor market will keep inflation too high, Bloomberg News reported. The official — who finishes his term on the Monetary Policy Committee at the end of August — said that he needs to see more evidence that underling price pressures are receding before backing cuts despite “encouraging signs” on inflation.