AstraZeneca cancels £450m Liverpool investment, blaming UK government funding cuts – business live
AstraZeneca cancels Speke investment, blaming government funding cuts
FTSE 100 pharma company AstraZeneca has said that it is cancelling a planned investment to expand a vaccine production site in Speke, Liverpool.
The company blamed a reduction of support from the Labour government.
An AstraZeneca spokesperson said:
Following discussions with the current government, we are no longer pursuing our planned investment at Speke.
Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous governments proposal.
The site will continue to produce and supply our flu vaccine, for patients in the UK and around the world.
Key events
AstraZeneca’s decision to cancel its investment in Speke is likely to be seen as a major blow to the Labour government.
In a much publicised speech on stimulating growth on Wednesday, chancellor Rachel Reeves said that She Britain’s economy has “huge potential” and is at the “forefront of some of the most exciting developments in the world like artificial intelligence and life sciences”. However, one of the UK’s life sciences champions has now canned a £450m investment.
AstraZeneca, led by chief executive Pascal Soriot, had already said that the investment plan was on pause as it sought increased government funding.
The company had been in talks over “incentives” to support the expansion of its childhood-vaccine factory in Speke in order to turn it into a bigger research and development (R&D) and manufacturing centre across about six hectares (15 acres) where several vaccines could be produced at once.
The investment had initially been agreed by Rishi Sunak’s Conservative government in March last year. However, the Labour government sought to reduce the amount of state aid on offer.
AstraZeneca cancels Speke investment, blaming government funding cuts
FTSE 100 pharma company AstraZeneca has said that it is cancelling a planned investment to expand a vaccine production site in Speke, Liverpool.
The company blamed a reduction of support from the Labour government.
An AstraZeneca spokesperson said:
Following discussions with the current government, we are no longer pursuing our planned investment at Speke.
Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous governments proposal.
The site will continue to produce and supply our flu vaccine, for patients in the UK and around the world.
Over the last year, the US core personal consumption expenditures (PCE) rose by 2.8%.
That is down from above 5% in 2022, although the Federal Reserve targets a headline rate of 2% inflation. The stickiness above 2% is one of the reasons why the Fed has not so far bowed to Donald Trump’s bidding and cut interest rates.
Nick Timiraos, the Wall Street Journal’s main Fed-watcher, said:
The core PCE index rose 0.16% in December, a touch softer than expected. Core prices are up 2.8% over the preceding 12 months. The 6-month annualized rate ticked down to 2.3%, the lowest in 2024
US core inflation up 0.2% in December, in line with forecasts
It’s America’s turn with inflation data: the Federal Reserve’s preferred measure of inflation came in as expected, up 0.2% in the month.
The core personal consumption expenditure (PCE) index is the one that the US central bank looks to when it wants to get a sense of underlying price pressures (and stripping out volatile food and energy prices).
Core PCE rose by 0.2% in December, up from the 0.1% in November, but as expected by economists polled beforehand by Reuters.
No surprises there, then: gold prices, US stock market futues and the dollar are all trading within the range of the day’s earlier trading.
German inflation falls, supporting ECB’s rate-cutting path
German inflation has fallen to 2.3%, surprising economists who had expected it to remain steady.
The data will bolster the case for the European Central Bank to continue on its path of cutting interest rates.
Prices actually fell by 0.2% during the month of January, according to Germany’s federal statistics office. That compared with an expected increase of 0.1%.
Economists had expected prices to be 2.6% higher than a year ago.
The inflation rate excluding food and energy, often referred to as core inflation, is expected to be +2.9% if the preliminary data are confirmed.
There was a wobble across global stock markets earlier in the week when the buzz around Chinese artificial intelligence startup DeepSeek rattled investors.
The model’s low price and alleged low computing power requirements for training upset the narrative of ever-increasing use of chips and money to power the AI boom.
Investors appear to have been somewhat reassured over the past three days, although advanced chipmaker Nvidia – the biggest listed beneficiary of the AI boom – is still down by nearly 13% this month.
The US is still scrambling to work out how DeepSeek did it. Bloomberg News reports that the White House is looking at whether the startup used middlemen to buy Nvidia chips. They wrote:
US officials are probing whether Chinese AI startup DeepSeek bought advanced Nvidia Corp. semiconductors through third parties in Singapore, circumventing US restrictions on sales of chips used for artificial intelligence tasks, people familiar with the matter said.
Officials in the White House and Federal Bureau of Investigation are also trying to determine whether DeepSeek used intermediaries in the Southeast Asian nation to purchase Nvidia chips that the US has banned from sale to China, said the people, who requested anonymity to relay private conversations.
It is not just UK stocks setting new record highs on a daily basis this week: the Euro Stoxx 600 set its fourth record in a row today.
To be fair, those two things are related: the UK makes up about a fifth of the index. But stocks across Europe have been helped by the European Central Bank’s loosening of monetary policy and the lack – for now – of tariffs from Trump.
Donald Trump has two policy aims that most economists believe are directly contradictory: raising tariffs, and cutting inflation.
Joseph Stiglitz, an economics professor at Columbia University and a winner of the Nobel memorial prize in economic sciences, explains it in this piece of analysis. Stiglitz was also a Clinton aide.
Stiglitz said:
Virtually all economists think that the impact of the tariffs will be very bad for America and for the world. They will almost surely be inflationary.
It’s inconceivable that other countries won’t retaliate. Even if some of the governments might not want to retaliate, their citizens will demand that you can’t allow yourself to be beaten up. When you make like a gorilla thumping on his chest, are countries just going to say, ‘Are we chopped liver?’ Their politics will demand that they do something.
The full analysis is worth a read.
UK health bosses privately admitted that a lack of border inspections in the wake of Brexit had left British consumers exposed to diseased meat, an investigation has found.
The Bureau of Investigative Journalism has previously uncovered a host of failings in the government’s handling of outbreaks of drug-resistant salmonella, particularly that linked to supermarket chicken from Poland. Illnesses connected to the outbreaks – which also affected eggs – peaked at different points between 2020 and 2024, while border checks that were supposed to be in place post-Brexit were being repeatedly delayed.
A set of documents seen by TBIJ now reveal that in a series of high-level meetings in late 2023, food safety and health bosses admitted that the UK’s borders could have been allowing infected meat to enter the country unchecked.
You can read the full report here:
FTSE 100 on course for strongest month since November 2022
As we approach the middle of the trading day in Europe, London’s FTSE 100 is up 0.4%.
That leaves it up 6.2% this month, putting it on track for the biggest monthly gain since November 2022. It is on track for its second consecutive record close at 8,680 points.
London’s valuations have been helped by healthy earnings, interest rate cuts, as well as a relatively strong dollar which boosts foreign income when accounted for in sterling.
The biggest gainer on the FTSE 100 this morning is Smiths Group, after it said it would break itself up. However, the break-up under activist pressure raises the question of whether it will bow to further demands and move the business’s stock market listing to the US.
The mid-cap FTSE 250 index also rose by 0.4% on Friday.
