Good morning. Today we're talking about the shake up in the stock market rules, AI's disruption to the education sector, eventful shareholder meetings and US rate rises.

Big Stories

Stock market shake up

The government has proposed major changes to the stock market listing rules in a bid to make London more attractive as a financial centre. Proposals will make it easier for private companies to go public by relaxing rules, for example removing the requirement for firms to have three years of audited financial accounts. While the UK has been Europe's biggest capital market for years, listings in the country have dropped by 40% since 2008, according to a government review. In recent years a number of high profile British firms have shunned the London in favour of listing in the US, most recently Cambridge-based chip designer Arm announced it would list in New York later this year. But critics argue that the current strict rules are what makes London attractive in the first place and are there to protect investors.

AI revelation dents education firms

This week US digital learning provider Chegg revealed that the rise of the artificial intelligence chatbot ChatGPT is harming its growth. The company said that students were turning to the chatbot for homework help instead of its services leading to a drop in subscriber numbers. The admission – the first of its kind – sent shares in the firm down 50% with concerns rippling to the wider sector: Shares in publisher Pearson and language-learning app Duolingo dropped about 15% and 10%, respectively. Online education thrived during the pandemic as students turned to remote learning but the industry is scrambling to incorporate AI chatbots into its services in order to survive.

Dramatic shareholder meetings

Yesterday two FTSE 100 companies had eventful annual shareholder gatherings. In London the Barclays meeting was disrupted by climate protesters condemning the bank’s role as one of Europe’s largest funders of fossil fuels. Singing a version of the Spice Girls’ Thank You Very Much, the activists sang: “Stop right now, no more oil and gas. Stop burning fossil fuels and end this madness.” In Leatherhead investors in consumer group Unilever rejected the CEO’s pay packet over concerns that it’s too excessive. Alan Jope’s £5m remuneration would be 113 times more than the average employee’s pay. The shareholder vote is advisory so Unilever could still make the payment.

US rate hike nears end

Federal Reserve Chair Jerome Powell hinted the US central bank’s latest interest-rate increase could be the last one, but stopped short of declaring victory in the battle against rapid price increases. Last night the bank announced increased its rates by 0.25% - its 10th hike in 14 months - to 5.25%, the highest level in 16 years. Powell left the door open for officials to keep raising borrowing costs if inflation remains more stubborn than they expect, and pushed back strongly against market expectations that the Fed will be cutting rates by year-end. The message suggests officials will resist backing down on their inflation fight even if the US economy begins to falter.

Elsewhere...

Dialling off: The government have announced a clampdown on the use of cold calls and mass texting to sell financial products as part of a strategy to combat fraud.

Banking profits: Interest rate rises helped Lloyds Banking Group beat first quarter profit forecasts, but early signs of stress among some borrowers pointed to tougher times ahead.

Taxing errors: KPMG is racing to resolve an embarrassing administrative mix-up which has left British-based employees being given erroneous information about their tax payments.

Takeover on pause: The UK will investigate Adobe’s $20bn acquisition of web design software firm Figma to find out if it would lead to a “substantial lessening of competition”.

AI review: The UK competition regulator is launching a review of the artificial intelligence market.

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Number Of The Day

40%

The proportion of all crime that is fraud, costing the UK £7bn.

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