U.K. Prime Minister Keir Starmer hosted European Commission President Ursula von der Leyen and other senior officials in London for a significant summit aimed at resetting relations following the tumultuous Brexit period. This annual convening comes at a moment of growing global uncertainty. Looming economic uncertainties are now dominating trade and investment decisions from one end of the continent to the other.
The annual summit aims to repair the divisions that have developed since Britain left the EU in 2020. Critics of the current government express concern that Starmer’s administration risks reversing key Brexit decisions, as discussions between the U.K. and EU focus on collaborative strategies moving forward.
In recent developments, British government bond yields have surged, reflecting investor optimism regarding the renewed dialogue between the U.K. and EU. Persistent borrowing costs are rising. Both sides are clearly dedicated to pushing through the failures of the past and working towards a more collaborative future, one built on communication and trust.
At the summit, Starmer and von der Leyen discussed deepening economic cooperation, including improving trade relations between the US and Europe. Throughout, the leaders underscored the need to evolve and innovate in response to new challenges. They stressed the shared interests that make collaboration beneficial for both organizations.
The framework agreement between the U.K. and the EU to reset their contentious relations is important. It comes at a moment when large industry actors in both areas are facing acute economic stress. Big beverage company Diageo announced this week that it would do the same. The company believes it can recapture roughly half of these costs through current efficiency processes prior to implementing any price increases. This is in addition to the firm’s anticipated $1 billion tariff hit from U.S. tariffs. They are forecasting a $150 million deficit due to emergency tariffs that former President Donald Trump slapped on them.
Boosting cash flows, Diageo is implementing a $500 million cost savings program. This effort will save time and increase efficiency as the market remains active and unpredictable.
Meanwhile, Volkswagen is facing challenges of its own as investors have demanded substantial changes in the company’s management structure, leading to a 5% drop in its shares. This example highlights the increased pressure that firms are facing within a changing economic environment.
Ryanair reported mixed financial results. The airline’s profit after tax was 16% lower year-on-year at 1.61 billion euros ($1.8 billion). This decline was offset by an average 7% reduction in average fares across 2024. Even with this drop-off, Ryanair had a stunning 9% growth in passenger numbers, serving over 200 million passengers for the first time.
“We’ve reported about 1.61 billion [euros] net profit in a year when average fares fell by 7%” – Michael O’Leary
“The gap between us and every other airline in Europe is widening in terms of costs. That puts us in a very strong position.” – Michael O’Leary
In a further sign of the changing times, Dutch tech investor Prosus has launched a rival cash offer of 4.3 billion euros. They want to purchase delivery behemoth Just Eat Takeaway.com NV. This acquisition represents Prosus’s stated desire to be at the top of the quickly changing, very competitive delivery sector.
They are deeply aware of the long-term repercussions that their actions, whether we like it or not, will have on not only their countries but the international economy.
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