Iran’s rial falls to record low as Scott Bessent warns of ‘economic D-day’ – business live

New Zealand prime minister Christopher Luxon has said his party will introduce a bill in parliament that ⁠seeks to ban children ⁠under ​16 from using social media, proposing fines of up to 10% of a platform’s global revenue for non-compliance.

The bill would ⁠require social media platforms to take reasonable steps to verify users’ ages, including by utilising existing account information, facial technology and ⁠digital identity documents.

“We simply cannot accept the harm being done to a generation of ​New Zealand children,” Luxon said ‌in a statement on Monday.

“Social media ‌is exposing them to harmful content, addictive technology and pressures they are not ‌equipped to deal with and it’s affecting their family life, mental health, sleep and education.”

It was not immediately clear if the bill would garner sufficient support to pass through parliament, with one of Luxon’s coalition partners – the New Zealand First party – saying it would not support it.

“We have been concerned with ‌the proposed legislation and the direction and slippery slope that legislation like this will inevitably take our country,” New Zealand First’s ​leader, Winston Peters, who is also the country’s foreign minister, said on X.

In December, Australia became the world’s first country to ban social media for children under 16, blocking them from platforms including TikTok, Alphabet’s YouTube and Meta’s Instagram ⁠and Facebook.

That legislation had been a “colossal failure”, Peters said, adding that ​keeping children off ​social media should be the responsibility ​of parents.

“I won’t pretend that it will be simple or ​that it ‌will be perfect,” Luxon ​said at an ​event.

“We won’t get every single child off social media. Some will always find ways around it, but frankly, it’s just way too important not to at least try.“

Another report out today:

The government has promised that business rate valuations will be “made fairer” for pubs and hotels in England and Wales, as Andy Burnham faces growing calls to help the UK’s struggling hospitality sector.

An independent review for England and Wales will look at improving the system for hospitality venues, which were hit by higher business rate bills this year after the end of pandemic-era relief and when new revaluations took effect.

It comes after Burnham announced last month that he would cut business rates for pubs, social clubs and live music venues in England by 20% from April next year.

The government has faced calls to reduce the tax burden on hospitality businesses, which have also struggled to cope with rising energy and food bills in recent years.

Some good news for the UK (and new PM Andy Burnham and his team):

Productivity in the UK – a vital measure of economic health – is growing more strongly than official figures suggest, according to analysis from the Resolution Foundation.

The thinktank suggests the chancellor, John Healey, may have inherited an economy finally starting to emerge from the long shadow of the 2008 global financial crisis.

Productivity measures the economic output produced by each worker, and is a crucial determinant of growth.

The Resolution Foundation reconsiders the UK’s recent productivity record, using what it argues is a more accurate snapshot of the workforce than the widely criticised labour force survey.

The graduate jobs market is being squeezed from both sides, said Lukas Kaminskis, chief executive of Turing College. He explained:

Businesses are cautious about adding headcount while costs, including higher employer national insurance contributions and energy bills, affect profits.

At the same time, AI can increasingly perform some of the routine work that traditionally gave graduates their first step onto the career ladder. This does not mean there will be no jobs for young people, but it does mean a degree alone is becoming less of a guarantee of employment.

The uncomfortable truth is that too many graduates are leaving university with academic knowledge but without the practical digital skills employers can put to use from day one. Technology is changing jobs faster than many traditional degree courses can keep pace, leaving young people qualified on paper but underprepared for the workplace they are entering.

Employers increasingly need people who can use AI, interpret data and work confidently with digital tools, rather than compete with technology. These skills are becoming essential across almost every industry, not just within technology companies. Universities therefore need to place far greater emphasis on employability, practical projects and real workplace experience.

This is also why apprenticeships and other work-based routes deserve much more attention. They allow people to learn while working, develop skills an employer actually needs and finish with experience as well as a qualification.

University will remain the right choice for many, but in a job market changing this quickly, we need to stop presenting a traditional three-year degree as a guaranteed route into a successful career.

Over here, graduate job vacancies in the UK have sunk to their lowest level since they started being tracked a decade ago, according to a recruiting website.

Just 8,383 jobs for people leaving university were advertised in July, Adzuna reported on Monday, down 45% compared with the same point last year and the lowest since the company started gathering the data in 2016.

The number comes as 262,820 people prepare to go to university in September, a record high that underlines the tough conditions facing graduates entering the job market as entry-level roles are threatened by AI.

About 1 million young people in the UK were not in education, employment or training, otherwise known as Neets, in the first quarter of this year, according to the Office for National Statistics.

Adzuna said sectors including healthcare, nursing, hospitality and logistics posted fewer vacancies, adding that the figures suggested that a recovery reported during the spring had gone into reverse.

Andrew Hunter, a co-founder of Adzuna, said:

July’s numbers are a step backwards, not a blip. The annual vacancy decline got worse for the first time since January, and (the number of) jobseekers per vacancy are now higher than they were a year ago.

The graduate job market also keeps setting new lows, which tells us employers still haven’t found a reason to open up hiring at that level.

The figures point to a sharp worsening in the graduate market compared with a decade ago. In 2017, there were more than 55,000 graduate positions.

More recently, employers have also reined in their hiring in the face of increases in national insurance contributions and the minimum wage announced by the former chancellor Rachel Reeves in her last two budgets.

The extra labour cost for businesses also comes as some companies are prioritising investment in automation and artificial intelligence tools rather than hiring.

Shein’s announcement was somewhat underwhelming.

The online retailer, which built a fast-fashion empire on what seemed like impossibly low prices, has been forced to lower its own valuation after falling into the red earlier this year.

It is one of the longest-awaited initial public offerings (IPO) of recent years, after plans to list in New York were blocked by regulators over forced labour concerns. Shein then considered a £50bn float in London, but faced similar questions about its supply chain from campaigners, MPs and investors.

The company moved its headquarters to Singapore between 2021 and 2022, a move analysts have said was intended to avoid increasing global scrutiny of Chinese firms.

In early 2025, Shein refused to reassure British MPs that its products do not include cotton produced in the Xinjiang region of China, which has been linked to forced Uyghur labour.

Founded by the entrepreneur Chris Xu, the company runs most of its operations from China but sells all its goods outside the country. It reached a valuation of $100bn in an April 2022 fundraising round, making it the third most valuable startup in the world.

There isn’t much action in European stock markets ahead of the US sanctions on Iran.

This comes after a sell-off in many Asian stock exchanges, following the Chinese online market place Alibaba’s heavily-discounted share placing.

In London, the FTSE 100 index is trading more than 15 points higher at 10,83, up 0.1%. The German, French and Italian markets are flat (just about in positive territory) and the Spanish exchange rose 0.2%.

South Korea’s tech-dominated Kospi index tumbled after Samsung Electronics said it spent $80bn to buy back its own shares after weeks of turbulent trading, triggering an 8.4% drop in its share price. The chipmaker’s shares, and the wider Kospi, had surged over months on optimism around the artificial intelligence boom, but peaked in June and have since fallen amid worries over companies’ debt-fuelled AI spending.

Tokyo’s Nikkei closed down 0.7% and China’s CSI 300 fell 1.2% while Hong Kong’s Hang Seng lost 1.9%.

Fast-fashion giant Shein announced that its stock market debut will take place on the Hong Kong exchange on 1 September, at a valuation of close to $27bn (£19.8bn), significantly down from a near-$100bn private market peak four years ago.

Iran’s currency has weakened to an all-time low against the dollar amid US efforts to cripple the country’s economy after almost six months of war.

US Treasury secretary Scott Bessent is due to announce new US sanctions against Iran at a press conference scheduled for 1pm EDT, which is 6pm London time.

The rial was trading at 1.992m per dollar on the unregulated market on Monday, according to Bloomberg News, which cited data from tracking website Bonbast – down 4.5% since Donald Trump announced a “crushing economic operation” against Tehran last week.

Another unofficial tracking site, TGJU, said the rial passed the 2m threshold on Sunday but closed lower.

The currency is under pressure from US efforts to isolate Iran by threatening the country’s few remaining trade partners while blockading its main ports in the Persian Gulf and choking off oil exports.

Last week, Iran’s central bank governor, Abdolnaser Hemmati, said its crude exports have “virtually stopped.” The United Arab Emirates, one of Tehran’s main trading partners, said last week that it had suspended all financial transactions with Iran until further notice.

Warning of an “economic D-Day,” Bessent wrote in the Financial Times today:

At dawn begins an economic D-Day — the single greatest financial offensive ever marshalled against an adversary.

Our objective is to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone.

Iran’s top financial newspaper, Donya-e Eqtesad, said the currency’s drop was driven by disruption to foreign-exchange transfers and declining exports alongside increased import demand and rising inflation expectations.

A group of senior Thames Water creditors plan a boardroom shake-up if Britain’s biggest water company avoids nationalisation and their turnaround plan goes ahead.

The creditors said they plan to appoint four new board members if the government allows them to take formal ownership of the struggling company.

They said they have lined up Liz Barber, the former boss of Yorkshire Water, to join the board, along with Dame Bernadette Kelly, the former permanent secretary at the Department for Transport, and Clive Selley, the former chief executive of Openreach, which builds and maintains the UK telecommunications network. Mike McTighe, the former chair of Openreach who is already advising Thames Water, would also join the board.

This comes as new prime minister Andy Burnham faces growing pressure to renationalise Thames Water under the government’s special administration regime, which would mean large losses for creditors. Burnham has previously indicated the government should take control of Thames in order to write off debts worth billions of pounds.

The company, which is struggling under a £20bn debt mountain, serves 16 million customers across London and the south east but has been on the verge of financial collapse for almost three years. It could run out of cash as soon as October – but still paid its finance chief a £1m signing fee earlier this month – a decision the environment department labelled “unacceptable”.

The creditors, a group of distressed debt investors and financial institutions that go by the name of London & Valley Water, are negotiating with ministers and the regulator Owat and want to take over Thames Water formally this autumn, if regulators will give leniency on future fines. Under their plan, they would inject short-term bridge financing ahead of a broader debt restructuring.

The consortium said the new directors would “oversee Thames Water’s 10-year turnaround and deliver a comprehensive transformation of Thames Water in the interest of customers and the public”.

McTighe said:

The challenge at Thames Water is huge. If this recapitalisation plan is accepted, we will apply full dedication as a new board, working alongside the executive team to transform the business and build a culture in which the customers and local communities who depend on Thames Water come first.

We will focus relentlessly on protecting public health and safety, respecting and improving the local environment, ensuring what people pay for their water is fair and the most vulnerable are protected, investing to secure clean and reliable water supplies for current and future generations, and being accountable for what we do.

It will take time to fix Thames Water, but we are committed to rebuilding trust with the customers and public Thames Water serves.

“Having stirred up a hornets’ nest in the Middle East, there may have been some expectation that the US administration would seek to bolster relationships elsewhere, but instead the opposite has happened,” said Susannah Streeter, chief investment strategist at the Wealth Club. She explained:

Relations between the USA and Canada have taken another fractious turn after trade talks collapsed, leading to 50% tariffs on some Canadian goods being imposed over the weekend.

Canadian exporters will be bracing for a drop in sales if US importers try and find alternative supplies rather than paying the tariffs. But it’s likely many costs will be passed on through wholesalers and retailers and it will be American consumers who’ll end up paying more, with tariffs acting like a tax on imports.

While the impact on inflation through this latest hike should be relatively contained, the cumulative effect of tariffs across multiple trading partners is an increasing worry, especially combined with higher energy prices induced by conflict in the Middle East.

The collapse in US-Canada trade talks could add another upward nudge to Treasury yields, with the trade row deepening concerns about US economic policy, mounting debt and inflationary pressures.

The Trump administration has tried to sell tariffs as a way of bringing in huge amounts of government revenue and helping tackle America’s debt mountain. But the chaotic tariff regime has been beset with legal challenges and has led to mass refunds, so far from making a dent, the US deficit is heading towards $2.1tn this year and the national debt has just breached $40trn.

Also, tariffs and wars are not just costly, they risk acting as a drag on growth while simultaneously pushing up prices, creating a toxic combination. Slower growth can also mean weaker tax revenues, making it harder for the US to grow its way out of its debt mountain. These are all concerns that will be playing on central bankers’ minds, ahead of the key Jackson Hole summit later this week, and investors will be looking for insights from Fed chair Kevin Warsh about where interest rates could head given the highly tricky economic and monetary environment.

Here is some analysis on the looming trade war between the US and Canada:

The calamitous collapse of trade negotiations between Canada and the United States is a warning to nations worldwide that pursuing any kind of dialogue with the current US administration is doomed at the outset, according to observers who say this recent episode indicates seeking a fair deal is futile.

Andrea Lawlor, an associate professor of political science at McMaster University in Ontario, said:

No matter the closeness of the historical relationship, the American administration has signalled that it now prioritises its interests above those of some sort of global economic coordination or harmony.

It feels like these talks ‘failed’. However, I’m not sure there was really a success to be had.

The two countries are now in a deepening trade war after weeks of urgent talks fell apart shortly before the 12am EST (5am BST) deadline on Saturday, when the US imposed 50% tariffs on $20bn (£14.6bn) worth of Canadian goods.

A defiant Mark Carney said on Saturday that he had rejected the deal because of last-minute US demands that would have undermined Canada’s sovereignty. The Canadian prime minister said: “They asked too much and they offered too little … you’re at war when you’re attacked, and we got attacked.” He promised to match US tariffs “dollar for dollar”.

Donald Trump had initially announced the tariffs on 20 July,saying Canada had unfairly discriminated against American businesses.

The core example provided by the White House is Canada’s bans on the sale of US alcohol in eight of its 10 provinces and all three territories. The removal of US spirits, wine and beer from shelves came into effect after Trump’s first round of tariffs, slapped on Canada in early 2025.

The breakdown of talks came as a shock. Trump had claimed on Tuesday that a three-day extension would be applied to the tariff deadline, as an agreement was all but signed. On Wednesday, he told reporters that a “very fair deal for both” sides had been ironed out.

But as details of the agreement began to leak to Canadian media, there was growing alarm that Carney and his negotiators were conceding too much in exchange for lower tariffs on steel, aluminium and cars.

Good morning, and welcome to our rolling coverage of the global economy, the financial markets, the eurozone and business.

The Canadian dollar fell after the country’s trade talks with the US collapsed on Friday and Washington imposed 50% tariffs on $20bn of Canadian goods, prompting Canada to retaliate.

The Canadian dollar dipped 0.2% to C$1.3798 per US dollar, retreating from a three-month high. It had been strengthening on hopes of a trade deal with the US. The two sides appeared close to an agreement on Friday to lower tariffs on steel, aluminium and cars, but the deal fell apart at the last minute.

Mark Carney, Canada’s prime minister, said they were “walking away from a bad deal”, and would now “match Washington’s new tariffs dollar for dollar”. So that means Canada will face 50% new tariffs on goods including wine, furniture, dairy products, cement, clothing, fishing rods and hockey sticks, covering around 5% of Canada’s exports to the US.

Carney said that their own retaliatory tariffs on US steel, electronics, dairy, appliances, agricultural equipment, pulp and paper and other products would take effect on 8 September. The new US tariffs come on top of existing levies on cars, aluminium, steel and lumber.

Over in the US, president Donald Trump posted that “Canada wants the benefits of being a State, without being one!!! They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!”

Analysts at Deutsche Bank led by Jim Reid said:

There’s already been a market reaction this morning to the breakdown of the talks, with the Canadian dollar weakening against every other G10 currency, including a -0.26% fall against the US dollar. Otherwise, Bloomberg also reported overnight that Canada saw little chance of the talks resuming before the midterm elections.

Asian stock markets declined while oil prices also fell as markets waited for details of threatened US sanctions on Iran due later on Monday.

Japan’s Nikkei fell nearly 0.7%, Hong Kong’s Hang Seng dropped 1.9% and South Korea’s Kospi tumbled 3.2%.

China’s Alibaba shares slumped in Hong Kong after it launched a $10.2bn share sale at a ⁠sharp discount to fund development of chips, AI infrastructure and models.

Brent crude, the global oil benchmark, lost 1.6% to $92.81 a barrel.

Later this week, the annual Jackson Hole conference kicks off in Wyoming, and the new US Federal Reserve chair, Kevin Warsh, is due to speak on Friday.

His speech comes at a critical time, amid anxiety in government bond markets over inflation and Donald Trump’s tax and spending plans that helped push the national debt to over $40 trillion.

Analysts said bond traders would be looking for signals from Warsh over its commitment to fighting inflation.

The Trump-appointed head of the US central bank has previously signalled reluctance to “spoon-feed” financial markets over how it plans to set interest rates to keep fast-rising prices in check.

However, anxiety over Trump’s handling of the economy and investor fears that his war with Iran is stoking inflation have rocked global financial markets amid a dramatic sell-off in US government bonds.

The Agenda

• 1pm BST: Mexico GDP for second quarter (final)

• 1.30pm BST: US Chicago Fed national activity index for July