Good morning. Today we're talking about Meta back in growth, the US economy slowing down and Microsoft attacks the UK.

Big Stories

Meta turns a corner

After three straight quarters of falling revenue last year, the owner of Facebook and Instagram has started 2023 well with a 3% increase in first quarter revenue driven by advertising sales. The numbers beat expectations and Facebook gained users again after losses last year. The news was well received by investors with the share price jumping 12%. But profit plunged by nearly $2bn as the metaverse unit kept bleeding cash and layoffs – in a bid to streamline operations - meant high severance costs.

US slows down

The world’s largest economy grew by 1.1% in the first quarter of this year, less than analysts expected and much slower than the 2.6% expansion in the final three months of 2022. The slowdown in growth is a sign that the recent aggressive interest rate hiking by the Federal Reserve is beginning to curb economic activity and bring down decades-high inflation. The US central bank has raised interest rates from near zero to nearly 5% in the past year, the fastest increase in decades. Investors expect the Fed will add another 0.25% next month, even as the economy slows, to get inflation back to 2% from 5% now.

Microsoft hits back

The president of the tech giant has attacked the UK after it was stopped from buying US gaming firm Activision, saying the EU was a better place to start a business. In response Downing Street defended the UK as an “extremely attractive” place for tech firms. This week the UK competition regulator blocked the $70bn deal saying it would hurt competition in the cloud gaming sector. The move came as a surprise because the regulator had previously said Microsoft had dealt with its concerns about the console gaming market. The decision, which Microsoft plans to appeal, puts a strain on the deal while the companies wait for competition decisions from the EU and the US. 

Elsewhere...

Record rents: Average monthly rents outside London have reached a record high of £1,190, with tenants in the capital paying more than £2,500 for the first time, according to Rightmove.

Climate clash: Climate protesters have disrupted BP’s annual general meeting where the oil company faced a backlash from some shareholders over its decision to water down its climate commitments.

Gambling shake up: The government set out long-awaited plans to crack down on problem gambling as it aims to bring regulations up to date with a rise in betting online and on smartphones.

AI accounting: PwC will invest $1bn to develop AI tools for its staff to use across its audit, tax and consulting services in its US business, but has insisted that it won’t lead to job losses.

Striking out: Two union disputes with train operating companies are to result in fresh strikes - including on the days of the Eurovision Song Contest and FA Cup finals.

Banking boost: Barclays has reported a first quarter profit above expectations, hailing a resilient performance from its consumer bank.

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The number of subscribers Netflix lost in Spain last quarter as it introduced a password-sharing fee.

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