Good morning. Today we're talking about a global IT meltdown, Burberry’s leadership change and the rising pound.

Big Stories

Global IT meltdown

A global IT meltdown crippled businesses on Friday, impacting airlines, banks, hospitals and public transportation. This cascading disruption stemmed from a faulty update from CrowdStrike - a dominant cybersecurity software - for Microsoft Windows customers. Estimated to control 24% of the market and used by over half of Fortune 500 companies, CrowdStrike's widespread use amplified the impact. Microsoft said 8.5m devices were affected. This incident highlights the potential vulnerabilities of relying on a limited number of tech providers for critical infrastructure. A fix has been deployed, but recovery is ongoing. This event could become the largest and most expensive cyber outage ever, causing billions in losses and potentially long-term economic disruptions.

Burberry out of fashion

The CEO of Burberry, Jonathan Akeroyd, has left after just two years in the role. The news came as the British fashion brand announced that it could post a first-half loss if the slowdown in luxury demand continues. Further unsettling investors, Burberry suspended dividend payments, triggering an 11% drop in its stock price. This financial turmoil raises questions about the effectiveness of Burberry's recent efforts to reposition itself as a high-end luxury brand. Joshua Schulman, previously boss at US fashion house Michael Kors, takes the helm as Burberry's new CEO. The company also said it’s considering job cuts amid a 21% decline in retail revenue reported for the last quarter.

Pound on the rise

The British pound has soared to its highest level against the US dollar in a year, surpassing the $1.30 mark for the first time since July 2023. This surge is attributed to a combination of factors. Firstly, official data showed UK inflation stayed flat at 2% in June suggesting prices may be more stable than initially thought, leading some analysts to cool their expectations for interest rate cuts by the Bank of England. This keeps UK interest rates relatively attractive to investors compared to the US Federal Reserve, which is expected to maintain its hawkish stance. Additionally, the pound has also been boosted by market hopes that the new Labour government will offer economic stability.

Elsewhere...

Pay uplift: The chancellor has hinted that she may give public sector workers above-inflation pay rises this summer.

Coffee u-turn: Pret A Manger is ditching its “too good to be true” free drinks perk and food discount for subscribers.

Streaming success: Netflix added 8m subscribers in the last quarter due in part to the international success of Baby Reindeer and Bridgerton.

Cooling wages: UK wage growth slowed in May to the lowest level in two years amid a cooling jobs market.

Mega deal: Google owner Alphabet is in advanced talks to buy cybersecurity startup Wiz for $23bn in what would be the tech giant’s biggest-ever acquisition.

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