Good morning. Today we're talking about the falling dollar, lacklustre London listings and Microsoft cuts.

Big Stories

US dollar sinks amid debt surge

The US dollar has experienced its worst first half of the year since 1973, a decline attributed by experts to President Trump's tariff policies and escalating government borrowing. Investor apprehension over the soaring deficit is leading to a pullback from US Treasury bonds, consequently weakening the currency. The recently passed tax and spending bill, narrowly approved by the House, is projected to add nearly $3.3 trillion to the national debt over the next decade. This sweeping legislation extends Trump's 2017 tax cuts for corporations and high-income earners, removes taxes on tips, and phases out clean energy incentives. Conversely, it significantly boosts funding for detention centres and border walls while implementing deep cuts, notably slashing Medicaid by $1 trillion over ten years – potentially stripping 12m people of healthcare coverage and triggering job losses. The bill also proposes a 20% cut to the Supplemental Nutrition Assistance Program (formerly known as food stamps), impacting over 40m low-income Americans. Democrats unanimously opposed the bill, citing the severe cuts to social programs. While the dollar's status as the world's reserve currency remains secure for now, its recent performance serves as a stark warning against the unsustainable accumulation of national debt.

Lacklustre London listings

The London IPO market has suffered its worst first half in three decades, with fundraising through initial public offerings plummeting to levels not seen since 1995. Just £160m was raised from five listings on London markets in the first six months of 2025, according to Dealogic data. This stark figure represents a significant blow to the UK's capital markets. This prolonged slump is largely attributed to global economic uncertainty, geopolitical instability and a diminished appetite for domestic equities among investors. This year alone, high-profile firms, such as Shein, have reportedly abandoned earlier plans for blockbuster London listings in favour of other venues, with Shein now reportedly eyeing Hong Kong. Companies are increasingly exploring alternative listing destinations, with several firms like Wise already shifting primary listings to New York, and AstraZeneca reportedly considering a similar move. Concerns over comparatively lower valuations and deeper liquidity pools in other financial centres, particularly the US, are key drivers of this trend. This listings slump significantly adds to London’s struggles to retain its former glory as a top destination for global capital. While the London Stock Exchange and the Financial Conduct Authority have introduced regulatory reforms aimed at boosting competitiveness, the market remains challenged by a "flight to quality" favouring larger companies and private market funding alternatives.

Microsoft restructures

Microsoft has announced its largest round of layoffs in over two years, impacting approximately 9,000 workers globally, representing about 4% of its 228,000-strong workforce. These cuts, affecting divisions including Xbox, sales, and its Redmond headquarters, are aimed at "best positioning the company and teams for success" in a "dynamic marketplace," according to Microsoft. Xbox CEO Phil Spencer conveyed in an internal memo that the reductions within the gaming division are intended to ensure "enduring success" and a sharper focus on "strategic growth areas." This marks Microsoft's second mass layoff in months and fourth round of redundancies in 2025, following a previous cut of 6,000 roles in May. These significant cutbacks occur as Microsoft continues to pour substantial investments into its ambitious AI initiatives. The company anticipates spending roughly $80bn in the last year on data centres, specialised computer chips, and other critical infrastructure to advance its AI capabilities.

Elsewhere...

Tariff talk: US President Donald Trump says countries that side with the policies of the Brics alliance that go against US interests will be hit with an extra 10% tariff.

New design: The Bank of England has announced it is inviting the public to vote on themes for the next series of banknotes.

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