Defence shares rallied the moment John Healey was named chancellor. By Tuesday afternoon, Downing Street had declined to confirm the number the sector actually wants, and ruled out the funding mechanism some had hoped for.

Healey resigned as defence secretary last month after accusing Sir Keir Starmer’s government of falling “well short” on military spending. Andy Burnham’s decision to hand him the Treasury was a surprise, and markets read it as an instruction rather than a consolation prize.

Shares in Babcock International, which builds warships and maintains Britain’s naval bases, rallied more than 7 per cent on the London Stock Exchange before closing up 4.1 per cent at £10.80½, one of the biggest risers on the FTSE 100.

BAE Systems, which builds fighter jets and submarines, rose 1.8 per cent. Qinetiq, spun out of the Ministry of Defence’s research agency, gained 3.1 per cent on the mid-cap FTSE 250.

For most business owners, the share prices are the least interesting part. The appointment has raised the prospect of greater private sector procurement, and that is where the money reaches the wider economy: through the tiers of engineering, machining, software, logistics and testing firms that sit beneath the primes.

That supply chain has been the target of a concerted push. The MoD is aiming to lift direct and indirect spending with smaller suppliers to £7.5 billion by May 2028, a 50 per cent increase, and has stood up a dedicated unit to help small defence firms navigate procurement. Manufacturers have separately pressed ministers to go further by tying foreign contract wins to binding reinvestment in Britain.

None of that works without the budget behind it. A spokesman for the prime minister said on Tuesday that Healey’s appointment was a “signal of intent” on defence spending, but declined to commit to increasing it to 3 per cent of GDP by 2030. Spending is due to rise to 2.7 per cent by the end of the decade. The spokesman also said “war bonds are not something we’re looking at”.

That gap between signal and commitment is the practical issue for suppliers weighing capacity investment. Order books built on 2.7 per cent look different from order books built on 3 per cent, and hiring or tooling decisions taken this year will be judged against whichever number turns up.

Healey’s appointment was welcomed by Stephen Phipson, chief executive of Make UK, whose members include BAE and Rolls-Royce, and which is pressing the government to bring down industrial energy costs and business rates.

“Manufacturers will welcome the appointment of someone with a reputation for being pragmatic, focused on delivery, and committed to making government work effectively.”

That welcome carries a bill attached. Make UK’s members are absorbing a near-£1 billion annual increase in business rates alongside some of the highest industrial electricity prices in Europe. A chancellor who wants a bigger British defence industrial base has to make it viable to manufacture here first, which is a Treasury question rather than a Ministry of Defence one.

Healey is not new to the building. He served as a Treasury minister in Sir Tony Blair’s government, which may explain why the appointment was read as more than symbolic.

Lord Dannatt, a former head of the British Army, told Times Radio that the appointment was “a masterstroke”.

He said: “John Healey, as we all know, resigned not that long ago, having said that the previous prime minister was unable to produce the funding that defence needed, and the previous chancellor was unwilling, so now he is the one behind the desk in No 11 and has really got to answer his own question.”

For SMEs in and around the defence supply chain, the answer arrives at the Budget rather than in this week’s share prices. Until then, the sensible read is that procurement reform is accelerating while the funding envelope stays exactly where it was.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

Tesla said Wednesday that its robotaxi fleet has logged more than 380,000 unsupervised miles across six cities in two states without what the company described as a “notable” safety incident.

Ashok Elluswamy, Tesla’s vice president of AI software, highlighted the fleet’s safety record during the electric vehicle maker’s second-quarter earnings call, telling investors it had recorded “zero notable incidents.”

Any reported incidents involved “other actors impacting us when we were stationary,” Elluswamy said.

“I’d like to emphasize how safe the operation has been so far,” Elluswamy said. “Zero notable incidents over 380,000 miles.”

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A Tesla robotaxi travels along South Congress Avenue in Austin, Texas, June 22, 2025. Tesla said that its robotaxi fleet has logged more than 380,000 unsupervised miles across six cities in two states without what the company described as a “notable” (Reuters/Joel Angel Juarez / Reuters)

Elluswamy said the results support Tesla’s camera-based approach to autonomous driving.

“Historically, the so-called experts have always claimed that you need lidars, radars, HD maps and the entire kitchen sink to drive safely,” he said. “Here, we show that such is not true. You can have safe, comfortable and affordable autonomy with just cameras.”

Tesla said mileage traveled by its unsupervised robotaxi fleet has grown at a double-digit weekly rate for months.

“We have grown at such a high compounding rate on a week-over-week basis over the last several months,” Elluswamy said. “Not only that, we expect to continue growing at such a large rate through the rest of this year.”

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A Tesla robotaxi operates on South Congress Avenue in Austin, Texas, on June 22, 2025.  (Reuters/Joel Angel Juarez / Reuters)

The remarks came one day after Tesla expanded its robotaxi service to Orlando and Tampa, according to Reuters.

Tesla launched the service in Austin in June 2025, initially placing safety monitors inside the vehicles. 

It later began offering fully unsupervised rides in Austin and expanded the service to Dallas, Houston and Miami, Reuters reported.

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Passengers exit a Waymo self-driving car, Dec. 26, 2025, in San Francisco. Unlike Waymo, which uses lidar sensors, Tesla relies mainly on cameras and AI software. (John J. Kim/Chicago Tribune/Tribune News Service via Getty Images / Getty Images)

Unlike Waymo, which uses “light detection and ranging” or “lidar” sensors, Tesla relies mainly on cameras and AI software, according to the outlet.

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“We expect that the time to launch to a new city will continue to trend towards zero, towards an end where we operate in entire states as a whole, instead of going city by city,” Elluswamy added.

Tesla could not immediately be reached by FOX Business for comment.

Reuters contributed to this report.

Jaguar Land Rover is recalling more than 15,000 vehicles over an issue that could affect the rearview camera, which could limit the driver’s rear visibility while reversing, according to federal regulators.

A total of 15,535 vehicles are potentially affected by the recall, covering 2021-2025 Land Rover Discovery models, the National Highway Traffic Safety Administration (NHTSA) said in its recall notice.

The NHTSA said that “insufficient drain holes” could prevent water from draining properly, damaging the rearview camera and increasing the risk of a crash.

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A total of 15,535 vehicles are potentially affected by the recall. (Getty Images / Getty Images)

“Water may not be able to drain away from the rearview camera due to insufficient drain holes, which may result in damage to the rearview camera,” the agency said.

“A water-damaged camera may not display an image, or may display an unclear image, when requested to do so,” the notice reads.

Jaguar Land Rover has received 100 U.S. claims and field reports related to the issue. No related crashes, injuries or fires have been reported.

The NHTSA said that “insufficient drain holes” could prevent water from draining properly. (Getty Images / Getty Images)

Car owners are instructed to take their vehicles to a dealership for inspection, where the camera will be replaced at no cost if necessary.

Dealers will also drill additional drain holes in the underside of the tailgate trim.

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Car owners are instructed to take their vehicles to a dealership for inspection, where the camera will be replaced at no cost if necessary. (Getty Images / Getty Images)

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Owner notification letters are expected to be mailed on or before September 11.

The ONS reported that consumer price index inflation stood at 2.6 per cent

Inflation has remained stubbornly above the Bank of England’s target rate, despite government pledges to address the cost of living crisis.

The Office for National Statistics reported that consumer price index (CPI) inflation stood at 2.6 per cent in the year to June. Analysts had forecast price growth of 2.7 per cent, below the 2.8 per cent recorded in May.

Core CPI inflation, which excludes volatile food and energy prices, also came in at 2.6 per cent.

The latest price growth figures highlight the UK government’s ongoing struggle to bring inflation in line with the Bank of England’s two per cent target.

Most City analysts and the Bank itself expect price growth to creep back towards three per cent later this year, as reported by City AM.

Business tax increases following Rachel Reeves’ debut Budget, combined with disruption to vital oil trade flows caused by the blocking of the Strait of Hormuz amid the Iran conflict, have unsettled the UK economy and left households vulnerable to steeper price rises.

Prior to her departure from government, Reeves unveiled a summer savings package comprising subsidies for children’s meals and travel, alongside a continued freeze on fuel duty beyond September. Analysts indicated the measures would help soften the blow of the inflation shock.

Since Andy Burnham entered Downing Street with John Healey serving as Chancellor, ministers have been pushing to “reprioritise” public spending in order to ease cost of living pressures. Burnham announced that VAT would be removed from household electricity bills from October this year, a move that could shave around 0.1 percentage points off inflation.

The Prime Minister has pledged to introduce a range of additional policies aimed at easing the financial burden on households.

However, the country’s seventh leader in 10 years has already faced criticism over making “unfunded” promises. Darren Jones, who served as Sir Keir Starmer’s chief secretary, took aim at Burnham for claiming that scrapping the digital ID scheme would foot the bill for the energy tax cut.

Bank of England officials are likely to scrutinise Burnham’s proposals closely, as well as his response to the energy price shock triggered by the Iran war.

The Bank is widely anticipated to hold interest rates at 3.75 per cent at its forthcoming meeting on 30 July.

Short-term gilt yields indicate that markets are pricing in at least two interest rate rises as the UK continues to grapple with persistently high inflation.