Your commercial news round-up: Keir Starmer resignation, heatwave, oil prices drop, easyJet takeover

Dimitar Dimitrov is a content and engagement coordinator at LawCareers.Net

Reading time: four minutes

Political upheaval is set to reshape the UK landscape as Prime Minister Sir Keir Starmer announced he’s resigning. Elsewhere, a heatwave has pushed electricity prices across Europe to multi-year highs, oil markets have stabilised as tensions around the Strait of Hormuz ease and easyJet has rejected a £4.9 billion takeover bid. Read on for LawCareers.Net’s pick of this week’s top commercial stories.

• Keir Starmer announced on Monday 22 June that he’ll step down as prime minister and Labour Party leader, saying he’s not best placed to lead the party into the next general election. Speaking in Downing Street, Starmer confirmed that he’d informed King Charles III and asked Labour’s governing body to set a timetable for a leadership contest. Nominations will open on 9 July and close by 16 July. British politician Andy Burnham is widely seen as the frontrunner after his recent by-election win in Makerfield and has confirmed that he’ll stand.
  
  The next prime minister will face significant economic challenges, according to BBC News, including weak job opportunities, stagnant living standards and pressure on public services. Investment shortfalls, Brexit, covid-19 and rising energy and food prices have affected productivity and finances. Meanwhile, hiring is at a five-year low, particularly for young people, while housing affordability remains strained due to high rents and insufficient homebuilding. Burnham is expected to give a speech next week, pledging to grow the economy if he becomes prime minister, while also adhering to the government’s fiscal rules.
   
• Electricity prices across Europe have surged to multi‑year highs during a heatwave that has driven up demand and disrupted power generation, with Great Britain paying more than six times the usual price for imported electricity. High temperatures have led to increased use of air conditioning and electric fans, while reduced wind speeds have cut renewable output, and extreme heat has caused outages at gas plants across the UK and lowered production at nuclear facilities in France. In response to peak demand between 5:00pm and 7:00pm on Tuesday 23 June, Great Britain’s energy system operator paid about £470 per megawatt-hour for electricity imports, compared with an average of £71 per megawatt-hour last June and £123 on Monday 22 June.
  
  Demand was further strained on Tuesday evening by millions who watched England’s World Cup match, with electricity usage rising during breaks as viewers. Head of power trading at the consultancy LCP Delta, Shivam Malhotra, estimated that England’s game increased demand on Britian’s power system by about 300 megawatts at half-time and 225 megawatts during full-time.
   
• Oil prices have fallen to levels last seen before the Iran war, as shipping through the Strait of Hormuz begins to recover. According to BBC News, the price of brent crude briefly dropped below $72.48 (£55) a barrel – the level recorded on 27 February, before US and Israeli strikes on Iran – before rising slightly to $72.63. Prices had fluctuated sharply after Iran responded to the attacks by effectively closing the strait, a key route for global oil and gas shipments. The decline follows a 17 June Memorandum of Understanding between the US and Iran, which established a 60‑day negotiation period on Iran’s nuclear programme and other measures to end the conflict. Talks held in Switzerland last weekend led to the US partially lifting sanctions on Iranian oil exports. Shipping activity has increased significantly since the agreement. Around 80 ships have crossed the Strait of Hormuz since Monday 22 June, although this remains below pre-war levels of more than 100 ships per day, with hundreds still waiting in the Gulf.
   
• EasyJet has opened talks with US investment firm Castlelake after rejecting a £4.9 billion takeover bid, while allowing limited access to its commercial information in hopes of securing a “more attractive proposal”. The airline unanimously rejected Castlelake’s fourth proposal of 650p per share, stating that it “substantially” undervalued the company and raised concerns about “ownership structure and deliverability”. Chief market analyst at the investing platform IG, Chris Beauchamp, said: “EasyJet’s board might be making a decent showing of rejecting the Castlelake bid, the deadline extension has been taken as a sign that some kind of deal is doable. Investors clearly expect a sweetened deal to come through, which accounts for the continued strength in the shares over the past week.” Following the developments, easyJet’s share price rose 8% to 582p on Thursday morning, according to The Guardian. Castlelake has until 5:00pm on 5 July to improve its offer or withdraw. 

Check the News every Thursday for this weekly commercial news round-up. Prefer to listen to your commercial news? Why not check out our Commercial Connect podcast?

Follow LawCareers.Net on LinkedIn and Instagram for regular business news updates.