UK government moves to acquire Speciality Steel UK
Newsflash: The UK government has decided to acquire the country’s third-largest steel producer.
The Business Secretary Jonathan Reynolds has announced the Government will “work towards” the public acquisition of Speciality Steel UK (SSUK), after ministers decided they could not support its sale to Norwegian steel startup Blastr Green Steel.
SSUK has been in liquidation since last year, and was part of Sanjeev Gupta’s Liberty Steel before its recent collapse.
The company is an important part of the UK steel sector as it can make steel for use in the auto, aero and defence sectors.
According to the government, SSUK’s four sites support over 1,300 jobs in Rotherham, Stocksbridge, Brinsworth and Wednesbury.
Reynolds is stepping in after deciding Blastr’s proposal could not provide long-term stability, certainty and value for money.
Reynolds says:
double quotation mark“We do not intervene in private companies lightly. But nor can we simply stand aside and allow the future of this company and over 1,300 jobs to be decided by default.
“Working towards public acquisition will keep options open while we work with local leaders, workers, industry and investors to determine the best long-term future for these sites, which could play a vital role in the future of the growth-driving sectors in our Industrial Strategy, including defence and advanced manufacturing.
“ I am determined that we take the time to properly assess the opportunities available here and make decisions that support growth, jobs and Britain’s industrial future.”
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Key events
FTSE 100 closes higher on day of AI jitters
Britain’s blue-chip stock index has ended the day higher, helped by the AI anxiety.
Companies seen as vulnerable to AI disruption led the risers in London, with software firm Sage (+5.2%) and data analytics firm Relx (+5.1%) top of the pile.
AJ Bell head of financial analysis Danni Hewson says:
double quotation mark“For London’s FTSE 100, today was another day when the lack of tech stocks was a boon. Investors rotated into defensive stocks in a bid to ride out current volatility.
“With the oil price staging its own drama as the price of Brent crude edged past $108 a barrel, the impact on consumers is tough to ignore. Petrol prices in the UK have hit levels not seen since 2022, and today’s hikes suggest further pain at the pump is on its way.
“The impact on consumers will be front of mind for the Bank of England’s MPC members when they meet on Thursday. Whilst a hike this week still seems unlikely, market expectation that there could be a shift has jumped to 40% today.”
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Blastr Green Steel: We are disappointed
Blastr Green Steel are not happy that they have been outflanked by the UK government in their pursuit of Speciality Steel.
A Blastr Green Steel spokesperson said:
double quotation mark“We are disappointed by the Government’s decision today concerning Speciality Steel UK, and we were not informed in advance.
Over the course of several months, we have advanced our plans for a private sector solution to acquire SSUK – and were today on site in South Yorkshire with investors and strategic partners. We have a fully-funded proposal – at no cost to the British taxpayer – that is ready to complete within 12 weeks.”
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ECB’s Lagarde: Europe faces risks of being cut off from AI
The head of the European Central Bank has warned that Europe risks being locked out of the AI revolution.
Speaking in Vienna, Christine Lagarde warned that Europe was lagging behind in the creation of AI breakthroughs, saying:
double quotation markLast year the United States produced 59 notable AI models and China produced 35. France and the United Kingdom produced one each. Along the rest of the AI value chain, the picture is the same: the United States hosts three-quarters of the world’s AI computing capacity; Europe hosts 5%.
Lagarde explains that many European firms have been put off from using AI models developed overseas because of data protection concerns.
And she then warns that Europe could face massive disruption if it was reliant on a foreign AI service which could potentially cut the continent off, saying:
double quotation markWith AI, the loss would be of a different kind. Within a few years it will be screening goods at the border, deciding which tax returns are audited, dispatching trains, watching patients on wards and clearing payments at banks. A withdrawal of access, or a change in its terms, would then reach every sector at once.
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Reynolds: SSUK plan isn’t ideological
Business secretary Jonathan Reynolds has insisted there is “nothing ideological” about the decision to acquire Speciality Steel UK after being questioned about the plan in the House of Commons.
Reynolds told MPs that the main barrier to a viable private sector buyer of Speciality Steel UK is “risk” and a “legacy of neglect” – which is why he plans to step in and buy the company instead.
Reynolds says:
double quotation markWhat is the barrier to a private sector solution? Effectively, it’s risk.
“The fact that this was left so long without activity from the Conservative government, that the workforce haven’t been making steel.
“The products, the customers, therefore, are in a position where that is a big, substantial challenge for any private sector entity to take on.
“I think the state, if we do end up with a public ownership position, is better able to take that on. But it is the legacy of neglect that has been the barrier.”
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Trade body UK Steel has welcomed the government’s move.
It believes the decision to acquire SSUK will give “added security” to the 1,300 employees in Rotherham, Stocksbridge, Brinsworth and Wednesbury.
It should also reassure potential customers that SSUK is returning to regular production and able to satisfy new orders.
UK Steel director-general, Gareth Stace, says:
double quotation mark“This Government is once again stepping up to do what is needed for the UK steel industry. SSUK is already well on its way to returning to full operations and retaking its place at the heart of critical UK supply chains.
It is crucial that the custodian of this key strategic asset is the right owner and investor, with the expertise and long-term ambition that the dedicated workforce deserve.”
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UK government moves to acquire Speciality Steel UK
Newsflash: The UK government has decided to acquire the country’s third-largest steel producer.
The Business Secretary Jonathan Reynolds has announced the Government will “work towards” the public acquisition of Speciality Steel UK (SSUK), after ministers decided they could not support its sale to Norwegian steel startup Blastr Green Steel.
SSUK has been in liquidation since last year, and was part of Sanjeev Gupta’s Liberty Steel before its recent collapse.
The company is an important part of the UK steel sector as it can make steel for use in the auto, aero and defence sectors.
According to the government, SSUK’s four sites support over 1,300 jobs in Rotherham, Stocksbridge, Brinsworth and Wednesbury.
Reynolds is stepping in after deciding Blastr’s proposal could not provide long-term stability, certainty and value for money.
Reynolds says:
double quotation mark“We do not intervene in private companies lightly. But nor can we simply stand aside and allow the future of this company and over 1,300 jobs to be decided by default.
“Working towards public acquisition will keep options open while we work with local leaders, workers, industry and investors to determine the best long-term future for these sites, which could play a vital role in the future of the growth-driving sectors in our Industrial Strategy, including defence and advanced manufacturing.
“ I am determined that we take the time to properly assess the opportunities available here and make decisions that support growth, jobs and Britain’s industrial future.”
Share
US 10-year Treasury yields hit 5% in bond sell-off
There are worrying signs in the bond market today too.
The yield, or interest rate, on US 10-year Treasury bonds has risen over 5% for the highest level since October 2023.
That follows the jump in the oil price today – Brent crude is now up 4.5% – and expectations that the US Federal Reserve will raise interest rates on Wednesday.
UK bond yields are rising too – with the yield on 10-year British gilts up 7 basis points (0.07 of a percentage point) to 5.4% for the first time since 2008.
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The Nasdaq 100 index hit a six-week low in early trading, dropping by at least 1.7%.
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Elon Musk’s SpaceX, which owns the Grok AI assistant, are down 1.7% this session.
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Nvidia, the chipmaking giant at the heart of the AI boom, is also caught up in today’s sell-off.
Shares in Nvidia are down 3.6% in morning trading in New York. That still appears to leave it as the world’s largest listed company, though, worth around $5tn.
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Trump: there’s a sick conspiracy against AI
Donald Trump has hit out at calls for a slowdown in AI development, claiming that there is a “sick conspiracy” against artificial intelligence and data centres.
In a punchy post on Truth Social, Trump posts (with typical modesty):
double quotation markThe only control or “guardrails” that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!
That rather indicates the White House will not be backing a slowdown in AI development, despite calls for it in recent days from the major US AI companies.
Trump to goes on to claim that his administration has reined in Anthropic’s Dario Amodei, writing:
double quotation markThe Trump Administration has stopped AI “people” from doing bad, or potentially bad, “things,“ like Dario (Anthropic!), who is now pretending to be a “perfect little angel” – and we will continue to do so! We already have tremendous CRIMINAL and REGULATORY power over these companies! There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China. WHOEVER WINS AI, WINS! We are leading China, and all others, and will continue to do so. Conspiracy Theorists, Treasonists, Traitors, and Leakers, BEWARE! Thank you for your attention to this matter! President DONALD J. TRUMP
Fact check: Anthropic and the White House did fall out earlier this year, when the AI company refused to ethical guidelines on its AI systems despite the threat of severe consequences.
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The S&P 500 share index, which tracks a broad swathe of the US stock market, is down 0.5% in early trading.
AI-powered robotics platform Teradyne (-9.2%) are the top faller, followed by Hewlett Packard Enterprise, who sell enterprise AI products to companies.
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UK unions to fight rollback of business regulation
Heather Stewart
Back in the UK seaside resort of Brighton, the TUC is expected to pass a motion at its annual congress this afternoon promising to campaign against the Labour party’s promise of cutting the costs of business regulation by 25%.
It was tabled by the Prospect union, which has members in watchdogs including the Health and Safety Executive and the Environment Agency.
Prospect’s general secretary Mike Clancy told the Guardian it was a mistake to think of such bodies as barriers to economic growth, warning:
double quotation mark“Regulators have been starved of resources, or constrained by public sector pay constraints – and consequently, they become a bottleneck, not because of the regulations, but because of the resources.”
Clancy added the government is “barking up the wrong tree” with the 25% promise, which could even be “dangerous,” if it results in important regulation being cut back for the sake of an “arbitrary” target.
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Updated at 10.02 EDT
