Tesla sales halve in Europe; markets welcome US delay to EU 50% tariffs – business live

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Bond prices rally, pulling down yields

European bond prices are rising this morning, pulling down government borrowing costs.

The yield, or interest rate, on German 10-year bonds has dropped by four basis points (0.04 percentage points) to 2.519%.

UK 10-year gilts are down almost 8 basis points, at 4.6%, while shorter-dated two-year gilt yields are down four basis points at 3.96%, the lowest in over two weeks.

This follows a recovery in US Treasury prices this morning.

Over the last couple of weeks, bond yields had been rising as prices fell amid a global debt sell-off.

The Financial Times is reporting this morning that the UK government is shifting to shorter-term borrowing to lower its interest bill, and to lift some of the pressure on its tax and spending plans.

Jessica Pulay, head of the UK’s Debt Management Office, told the FT that the DMO is softening Britain’s reliance on long-term borrowing.

Short-term borrowing is typically cheaper than issuing longer-term debt, but it also means a country has to return to the markets more often.

FTSE 100 jumps at start of trading

Stocks have jumped in London as trading resumes after the Bank Holiday weekend.

City investors are relieved that Donald Trump has delayed his threatened hike on EU tariffs to 50% until July, cooling trade war fears.

The FTSE 100 index of blue-chip shares is up 75 points, or 0.85%, to 8792 points, close to a two-month high.

Engineering group Melrose (+3.8%) are the top FTSE 100 riser, followed by technology firm DCC (+2.4%) and Rolls-Royce (+2%).

UK food inflation rises for fourth month in a row

Food inflation in the UK has risen for the fourth month in a row, figures show, driven by increases in the cost of fresh produce, including steak.

The annual rate of food price rises hit 2.8% this month, after a 2.6% rise in April, according to the latest shop price data from the British Retail Consortium (BRC).

However, prices overall remained in deflation – 0.1% cheaper than a year ago and unchanged from last month – with the cost of non-food goods falling, particularly for electricals as retailers cut prices to drum up business before a potential hit from Donald Trump’s tariffs.

Last night the EU’s trade commissioner Maros Šefčovič signalled that the bloc was “fully committed” to reaching a trade agreement with the United States.

Šefčovič posted on X last night that he had had “good calls” with US commerce secretary Howard Lutnick and US trade representative Jamieson Greer, and that the European commission “remains fully committed to constructive and focused efforts at pace” towards an EU-US deal.

Reuters: Toyota to move some GR Corolla production to Britain

More car news: Japanese manufacturer Toyota is moving some production of its GR Corolla sports car to Britain.

According to Reuters, Toyota will spend around $56m on a dedicated production line at its Burnaston plant in Derbyshire, to produce 10,000 cars annually for export to North America from the middle of 2026.

Reuters reports:

By shifting some production from Japan, Toyota aims to use excess capacity in Britain to help it cut delivery wait times for the car, said the people, who spoke on condition of anonymity.

The move was not in reaction to U.S. President Donald Trump’s tariffs on automobile imports, they said.

Reuters adds that the Burnaston site has suffered a decline in production since Brexit.

The news should cheer the UK government, as it

Markets welcome US delay to EU tariffs

There’s a sense of relief in the financial markets after Donald Trump delayed his threatened 50% tariffs on all European Union imports into the US.

Trump had shocked investors last Friday when he announced he planned a 50% tariff on EU imports from the start of June.

But following a call with European Commission president Ursula von der Leyen, that hike in levies has been delayed until 9 July, to give both sides more time to negotiate.

Stocks are set to rally in London today, with Wall Street also set to rise, as trading resumes after the bank holiday break

Yesterday, France’s CAC index rose by 1.2% while Germany’s DAX gained 1.7%, and the euro hit a one-month high against the US dollar.

Tony Sycamore, market analyst at IG, reports that “risk sentiment improved” after Trump announced the delay to his 50% tariffs on the EU.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, cautions that market rallies are on “thin ice”. She explains:

European markets are flirting with ATH [all time high] levels, US futures were also up yesterday — but the reality is that with every piece of incoming information, the collective welfare deteriorates.

Today, we are in a worse position than we were a month ago. And a month ago, we were in a worse position than we were three months ago. The global trade negotiation period was supposed to last 90 days—and now, it ends all of a sudden.

The tariffs won’t be brought below the 10% ‘universal’ level and market rallies are triggered not by good news, but by the least bad of the options — once Trump or his administration softens a previously crazy stance.

Introduction: Tesla sales halve in EU in April

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

Tesla’s sales across Europe halved last month, as the backlash against Elon Musk continues to hurt his electric car company.

The latest sales figures from industry body ACEA, released this morning, show that sales of Tesla cars fell by 52% year-on-year in the European Union in April, down to 5,475 units, from 11,540 a year before.

They fell 49% in the wider “EU + EFTA + UK” area.

The decline follows falls in Tesla sales in Europe in January, February and March, suggesting Musk’s controversial politics and association with the Trump White House are hurting the brand’s popularity, as anti-Musk protests have popped up at Tesla showrooms this year.

The overall EU car market grew slightly in April, ACEA reports, with new car registrations rising by 1.3% year-on-year, “despite the ongoing unpredictable global economic environment”.

So far this year, new battery-electric car sales have grown by 26.4%, to 558,262 units, capturing 15.3% of the total EU market share.

A chart showing the European car market this year Photograph: ACEA

Sigrid de Vries, ACEA’s director general, says:

“The share of battery-electric vehicles is slowly gaining momentum, but growth remains incremental and uneven across EU countries.”

Tesla’s sales in Europe this year have been disrupted by model changes, as it refreshed its offer with a new Model Y vehicle.

But it also faces tough competition from China’s BYD, which sold more EVs than Tesla in Europe for the first time last month, according to market researcher Jato Dynamics.

After several months shaking up US bureaucracy through the DOGE initiative, Musk appears to be refocusing on his day job.

Last weekend Musk posted that he was “back to spending 24/7 at work and sleeping in conference/server/factory rooms”, as he became “super focused” on his social media company X, artificial intelligence initiative xAI, Tesla and SpaceX.

The agenda

• 10am BST: Eurozone economic sentiment report

• 11am BST: CBI distributive trades survey of UK retailing

• 1.30pm BST: US durable goods orders data

• 2pm BST: US house sales