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Vistry shares plunge more than 30% after UK group issues profit warning

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Vistry shares plunged more than 30 per cent on Tuesday morning after the housebuilder warned its full-year profits would be almost a fifth lower than expected because of underestimated building costs.

The FTSE 100 group, one of the UK’s largest housebuilders, said the error would reduce its 2024 adjusted pre-tax profit by £80mn to £350mn, and cost a further £35mn over the next two years.

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It said the issue with understated costs stemmed from nine developments in its southern division, out of 300 sites in total. 

“We believe the issues are confined to the South Division and changes to the management team in the division are under way,” Vistry said. 

Shares were down 31 per cent to 896.5p early on Tuesday morning in London. Although some of the losses were pared back by lunchtime, they were still 22 per cent lower at 988.5p.

The profit warning marks a setback for one of the UK’s most buoyant housebuilders, which operates the Bovis Homes brand, following its takeover of Countryside in late 2022.  

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Vistry builds the majority of its homes for “partners” such as rental or social housing providers, making it less reliant on open-market sales than other large housebuilders. Rivals have been hit hard by the downturn in the housing market over the past two years. 

Unlike other large developers, which have slashed their output as sales declined, Vistry increased completions by 9 per cent to 7,792 in the first six months of 2024. It struck two huge deals to build homes for US private equity group Blackstone’s UK housing businesses in the past year, totalling £1.4bn. 

On Tuesday, Vistry said it still expected to complete at least 18,000 homes by the end of the year. 

The hit to profits and the possibility of further bad news surfacing at the group will rattle investors, although the company said it was confident the problem was isolated in one of its six divisions. 

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It could also raise questions over the pace of growth being pursued at Vistry under chief executive Greg Fitzgerald, who recently also became executive chair. He has set a “medium-term target” of roughly doubling adjusted profits to £800mn. 

“The key issue is whether these are isolated and ‘one-off’ in nature, with the worry being that they are more systemic, and reflective of inherent risk within the group’s partnership model that could recur in the future,” said Investec analyst Aynsley Lammin.

Vistry said the “total full-life cost projections” for the cost of nine of the 46 developments in the southern region, which covers Kent, Sussex, Hampshire and the Thames Valley west of London, had been underestimated by 10 per cent, including for some “large-scale schemes”. 

“We are commencing an independent review to fully ascertain the causes,” Vistry said. 

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The group added that it “continues to target a net cash position” at the end of the year, and will maintain a £130mn share buyback announced in September.

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A darkly intense Peter Grimes from Dutch National Opera — review

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Peter Grimes’s dead apprentices float like watery ghosts over the stage. Benjamin Britten’s ambivalent protagonist is a soul tormented by inner demons. Dutch National Opera’s new production of the opera in Amsterdam exonerates Grimes comprehensively, delivering a narrative of nightmarish communal violence. As director Barbora Horáková tells it, the new apprentice is bruised by youthful bullies, not by his rough master; and he falls to his death entirely on his own, at a moment when Grimes has his back turned.

Half the strength of Britten’s Peter Grimes (1945) lies in its ambiguity. Is the tormented outsider complicit in the demise of his young apprentices? By leaving us to make our own conclusions, Britten confronts us with our own preconceptions and bigotry. Although Horáková’s production is abstract, taking place in a black void with only the most minimal sets (Eva-Maria van Acker), she spells out many details. By the time angry villagers drive Grimes to his death, we have been shown his innocence.

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This is a darkly intense staging, busy but stark. If it seems a little relentless, that is also at least partly the fault of conductor Lorenzo Viotti, whose volume knob seems permanently stuck between “loud” and “very loud”. There is precious little nuance, no sense of architecture, and no reverie, which is a remarkable achievement in a score that boasts so much of all of these things. Viotti is both rough and technically weak; you can hear chorus and orchestra struggle to stay together. 

A woman sits on a chair amid a crowd of angry accusatory finger-pointing men and women
Johanni van Oostrum, centre, as Ellen Orford © Monika Rittershaus

Issachah Savage, who was to have sung the title role, was taken ill at the 11th hour, leaving John Findon with the Herculean task of memorising a staging that had taken five weeks to make in just one night. He does so commendably, delivering a moving Grimes with a capacity to express both the brutality and the poetry inherent to his character. Johanni van Oostrum has just the right combination of aching lyricism and maternal warmth for the part of Ellen Orford, Leigh Melrose brings complexity and anguish to the part of Captain Balstrode, and the smaller parts are excellently cast. 

In all, this is a passable retelling of a magnificent opera, but there are no revelations, and the evening often drags.

★★★☆☆

To October 22, operaballet.nl

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Major city brewery set to close after 150 years in ‘devastating’ blow

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Major city brewery set to close after 150 years in 'devastating' blow

A HISTORIC city brewery with a legacy spanning 150 years is set to close, putting 97 jobs at risk.

The Carlsberg Marston’s Brewing Company (CMBC) has confirmed plans to close Wolverhampton’s Banks’s Brewery.

The historic Chapel Ash site – which opened in 1875 – could shut for the final time in the autumn of next year

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The historic Chapel Ash site – which opened in 1875 – could shut for the final time in the autumn of next yearCredit: Alamy
But the site's closure doesn't automatically mean the end of Bank's branded beer

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But the site’s closure doesn’t automatically mean the end of Bank’s branded beerCredit: Alamy

The historic Chapel Ash site – which opened in 1875 – could shut for the final time in the autumn of next year.

CMBC blames a decline in cask ale volumes and Mahou San Miguel’s decision not to renew its licence partnership from 2025.

The site’s planned closure doesn’t automatically mean the end of Bank’s branded beer.

For now, customers can still enjoy the tipple as usual.

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However, it remains unclear if production will continue at another facility after the Bank’s brewery shuts down.

CMBC did retain the Hobgoblin brand by moving production to a new facility following the closure of its Wychwood Brewery last November.

Campaign for Real Ale (Camra) has demanded that Banks’s beer must continue to be brewed at the Marston’s Brewery site in Burton.

In its statement, CMBC said it was supporting colleagues across its wider network impacted by the proposals, including the 97 employees at its Wolverhampton brewery.

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Paul Davies, chief executive of CMBC, said: “This has been an extremely difficult decision, however it has been necessary to restructure our business to maintain our competitiveness in a challenging UK beer market.

“The team at Banks’s has been unwavering in its dedication and commitment to the brewery. We will ensure that we support all our people closely throughout this extremely challenging period.”

As part of the network restructuring, CMBC will increase investment in its breweries in Northampton and Burton, with the long-term aim of establishing Marston’s Brewery in Burton as a “national centre for craft beer and traditional ale brewing in the UK”.

Inside the World’s Smallest Pub

CMBC will invest more than £6 million in significant new projects at its brewery in Burton, including the refurbishment of its cask ale line, and invest in a new logistics depot in the Black Country region.

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Mr Corbett-Collins, the national chairman of the Camra has described the planned closure as “devastating but predictable” news for British brewing.

In July, Carlsberg announced plans to buy out UK pub-group Marston’s from their CMBC venture in a deal worth £206million.

CMBC proposed Bank’s brewery closure isn’t the first in recent years.

Last year, it closed the world-renowned Wychwood Brewery – famed for Hobgoblin Ale.

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The factory in Witney, Oxfordshire, shut in November 2023.

Its six staff – who had a combined 100 years of brewing experience.

Hobgoblin ales, as well as Wychwood brands Firecatcher and Dry Neck beers, are now brewed at CMBC’s other sites.

The drinks giant also closed Ringwood Brewery and shop at the start of the year, saying there was “no viable path forward”.

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The Temperance Street Brewery in Manchester shut up shop last year after more than a decade of trading.

The tap room, located on the outskirts of the city centre, closed less than a year after it was taken over by new owners.

It was put up for sale after the firm said its location in a residential area made expansion a challenge, but no buyer was found.

UK BREWERY NUMBERS

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THE SIBA UK Brewery Tracker shows there are 1,748 breweries across the country

It covers the period from April 1 to June 30 this year and the net change compared to March 31, 2023.

  • Scotland 133 (-3)
  • Northern Ireland 29 (-)
  • East 187 (-4)
  • North East 248 (-3)
  • North West 189 (-1)
  • Wales 96 (-)
  • South West 203 (-4)
  • South East 331 (-3)
  • Midlands 334 (-11)
  • UK: 1,748 (-29)

COST OF LIVING PRESSURES

The number of craft breweries in the UK fell from 1,828 at the start of 2023 to 1,815 at the start of the year.

That now stands at 1,748 according to the latest figures up to June from the Society of Independent Brewers and Associates (SIBA).

The SIBA UK Brewery Tracker takes into account all brewery openings and closures to give an accurate picture of the number of active brewing businesses.

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Craft breweries have been hit hard by the cost of living crisis and the pandemic.

While many producers pivoted to home deliveries during covid lockdowns, they were then hit by rising costs combined with people reigning ion their spending.

The prices of energy, rents and ingredients have all shot up. They have also faced higher interest rates when borrowing money to grow the business.

SIBA chief executive Andy Slee said when the latest figures on closures were published in July: “Independent brewers are reporting good sales growth and strong consumer demand, yet breweries continue to close.

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“For most breweries the challenge is financial pressures from rising costs and market access, as well as lingering Covid debt – something SIBA has strongly lobbied Government for help on.”

The Campaign for Real Ale’s (CAMRA) warned about the pressures on the drinks business this week as it published its Good Beer Guide 2025.

It said that many of the breweries that featured in last years guide have now closed and cited a “perfect storm” ofthe tax burden, few viable routes to market and stubbornly high energy bills among the factors.

CAMRA Chairman Ash Corbett-Collins said: “This year’s edition of the Good Beer Guide shows a brewing trade that continues to face huge challenges, but one that beer and pub lovers across the UK are still rallying behind.

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“CAMRA will be lobbying this new Government to show their support for independent breweries, to try and ensure that the Good Beer Guide 2026 is brimming with new establishments.”

As well as CMBC’s closure of Wychwood and Ringwood, it said the loss of Elland Brewery just months after its 1872 porter was crowned CAMRA’s Champion Beer of Britain 2023 and the award-winning Nottingham-base Navigation Brewery was “tragic” and a blow for the local community.

Last week, The Fourpure brewing company was placed into administration to “protect itself from market pressures”.

Administration is when all control of a company is passed to an appointed licensed insolvency practitioner.

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It doesn’t necessarily mean the end of the business.

Instead, administrators will try to help a company find ways to repay debts or solve its cashflow problems.

Its beers, such as Pomegranate IPA and Juiced Mango and Raspberry, are stocked in major supermarkets like Tesco, Asda, Waitrose and Ocado.

However, it’s not all bad news, an iconic 90s beer will return to UK pubs after 30 years.

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Announcing the come back on Instagram, Allsopp’s Beer revealed Double Diamond is set to make a return.

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Spain and Greece are ‘kicking tourists in the teeth’ with extra holiday taxes – expect to pay hundreds

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You family holiday could be costing you hundreds of pounds more due to environmental fees

BRITS are facing paying “hundreds of pounds more” for their family holidays abroad, a travel company boss has warned.

EasyJet Holidays chief executive Garry Wilson cited confusing new environmental fees being introduced by airlines and tour operators.

You family holiday could be costing you hundreds of pounds more due to environmental fees

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You family holiday could be costing you hundreds of pounds more due to environmental feesCredit: Alamy
EasyJet Holidays chief executive Garry Wilson cited new environmental fees as the reason why

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EasyJet Holidays chief executive Garry Wilson cited new environmental fees as the reason whyCredit: Alamy

He said that failing to demonstrate a “direct link” between the money raised and sustainability schemes would reduce bookings.

Spain, Greece and Tunisia are among locations popular with UK tourists which charge green taxes or have plans to introduce them.

In an interview at the annual convention of travel trade organisation
Abta in Costa Navarino, Greece, Mr Wilson said many destinations which suffered huge losses due to coronavirus travel restrictions decided that tourists should pay “this fee and that fee and the next fee”.

He said: “They’re named the ‘green tax‘ or ‘climate resilience’ or
whatever it might be.

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“Whilst I understand the ethos, (we need to) understand what you’re doing with that money.”

Mr Wilson said it was “understandable” if taxes were introduced with a “direct link” to initiatives such as installing systems that automatically switch off air-conditioning and electric sockets when hotel rooms are empty.

He warned that if the money just goes into a “big pot” then holidaymakers will think it is just another way of operators making extra money from them.

Mr Wilson said taxes were “going up and up and up when it comes to travel”.

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He added: “There has to be real thought put into what impact this is
going to have on demand.

“The way it’s being treated at the moment by a lot of destinations
isn’t necessarily helping build confidence and demand.”

The Sun’s Travel Editor Lisa Minot’s top picks for cheapest holiday destinations

A survey commissioned by Abta, which spoke to 2,000 UK adults, indicated that 38 per cent of people believed it was the responsibility of travel companies to manage the impact holidays had on the environment and local residents, rather than their own.

Some 22 per cent disagreed with the statement, while 40 per cent were neutral.

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What does this mean for British holidaymakers?

Here’s why I think it’s bad news for holidaymakers as well as the travel industry.

YOU’VE saved up all year for that precious family holiday. You’re travelling at the most expensive time of year. 

So it’s just a further kick in the teeth to find the price you paid ISN’T the final amount when you check into your hotel and discover tourist taxes imposed by our favourite Med destinations are an unexpected and unwelcome extra bill.

 Spain, Greece and Tunisia are just three who have increased the daily tourist tax – often justified by saying the money raised will help fight climate change and to enable destinations to become greener.

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 But holidaymakers need to see the proof – just where is the money raised going?

Often dressed up with very oblique language – the hotel I am currently staying in charges a €10-a-day ‘Climate Resilience Fee’ – these charges do nothing to encourage us to make more sustainable choices.

But what it could well do is make us consider taking our money where we’re not being hoodwinked.

With every penny precious these days, ever-increasing tourist taxes that are not clearly being used to improve those destinations are ill-judged and could well start to see families looking elsewhere.

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The poll also indicated that the most common areas of concerns about the impact of people’s holidays was preservation of culture and heritage, waste and plastic pollution, and the welfare of animals.

Abta chief executive Mark Tanzer said: “The ultimate goal for travel
is to have great places to visit that are also great places to live.

“If a destination intends to introduce a visitor charge as part of its tourism management, then it needs to make clear how that money is going back to support the local community and local people.

“Otherwise, these charges will only serve to add costs to consumers, without addressing the tourism issues important to local residents.”

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Spain, Greece and Tunisia are among locations popular with UK tourists which charge green taxes or have plans to introduce them

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Spain, Greece and Tunisia are among locations popular with UK tourists which charge green taxes or have plans to introduce themCredit: Getty

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India in rush to boost oil production before energy transition

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India will radically reform regulations and invite foreign oil majors to explore both onshore and offshore as it races to extract as much oil as possible while there remains a market for crude, the country’s oil and gas minister has said.

“I was with Exxon yesterday. I was with BP a few days earlier. I have had meetings with Chevron [ . . .] I went to Brazil and had a discussion with Petrobras,” Hardeep Singh Puri told the Financial Times’ Energy Transition Summit India in Delhi.

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“I said you come, join Oil India prospecting off the Andaman waters. Don’t make any investment, just come in. We will incentivise them. And if you strike oil and you are a partner, you will have first right of refusal,” Puri added. 

The minister said India had “several” oilfields the size of ExxonMobil’s 11bn barrel discovery in Guyana waiting to be found and that the country needed to move quickly to tap them before the world switched to other forms of energy in order to hit net zero climate targets.

“At the end of the day it’s a race,” he said. “If it remains there unexploited, when the [energy] transition becomes total, there is a philosophical debate on that. I keep telling Guyana, you got a big find, but by the time the oil starts coming into the market, the transition already would be in a pretty advanced stage.”

The Indian minister’s remarks appear to signal that Prime Minister Narendra Modi’s government intends to make up for lost time in offshore oil exploration and production, where some investment has been deterred by fluctuating regulations and persistent red tape.

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Estimates of India’s potential oil wealth differ hugely. S&P Global Commodity Insights believes there may be as much as 22bn barrels of oil in unexplored basins. Rystad, an energy consultancy, puts the figure at just under 8bn.

Meanwhile, analysts at the International Energy Agency are pessimistic about the chances of a significant increase in the country’s 700,000 barrels per day of production.

“In part, the absence of international companies may be due to lacklustre discoveries since the turn of the century,” they wrote, in their annual Indian Oil Market outlook. Over the past 23 years, 2bn barrels of oil have been discovered in India, compared with 10bn in each of Angola, Norway and Guyana and 40bn in Brazil.

“Against the backdrop of capital discipline, major players may be waiting on the sidelines for a world-class find before establishing operations in the country,” they added.

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Puri, who promised in July more than $100bn of investment opportunities in the sector by 2030, is trying to reduce India’s overwhelming dependence on imported oil. 

“We just took our eye off the ball. There was neglect,” he said. Only 10 per cent of India’s potentially oil-producing basins were being explored, while the country imported 85 per cent to 88 per cent of its oil and spent $150bn a year on foreign energy resources, Puri said.  

To trigger more oil exploration, he said he would radically change India’s legal framework. “We sat down with the majors and said: ‘Look, guys, tell us which are the areas where you want tweaking in policy?’ In the next session (of parliament), which will be fully next month, I will get that bill passed and it will be enacted into law,” he said. 

The proposed legislation reforms regulation of oilfield development to protect companies against sudden windfall taxes and gives them the right to arbitrate any disputes outside India, among other changes.

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Puri said India had also opened more than a million square kilometres that were previously “no-go areas” because of military or other restrictions, and had put “all the data which people require” on a repository at the University of Texas in Houston. 

BP, Reliance and Vedanta were among the companies that submitted bids this year in India’s ninth licensing round, for nine onshore blocks, eight shallow-water blocks and 11 ultra-deepwater blocks. Puri said 38 per cent of the bids were for areas that were previously restricted. 

Foreign oil companies are hoping India’s status as one of the world’s fastest-growing big economies will underpin future demand for crude. “India is growing and looks very, very healthy,” said Darren Woods, chief executive of ExxonMobil, at the company’s last results call.

“India is where the real growth is going to come, so it has an underlying advantage,” said Puri. He promised that a 10th auction round for licences would swiftly follow once parliament has passed his legislation. 

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Punters call me ‘UK’s strictest landlord’ because I charge THEM for leftovers – I don’t have time for idiots

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Punters call me ‘UK's strictest landlord’ because I charge THEM for leftovers - I don’t have time for idiots

BRITAIN’S “strictest landlord” has defended his decision to charge customers extra for not finishing their meals.

Mark Graham, 62, has owned and run The Star Inn pub in the tiny hamlet of Vogue, Cornwall, for the last 27 years.

Mark Graham, 62, has owned and run The Star Inn pub in Cornwall for the last 27 years

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Mark Graham, 62, has owned and run The Star Inn pub in Cornwall for the last 27 yearsCredit: Neil Hope
He hit back at a customer who tried to shame him online after they were charged an extra £2.40 because they piled their plates high - but ate barely any

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He hit back at a customer who tried to shame him online after they were charged an extra £2.40 because they piled their plates high – but ate barely anyCredit: Neil Hope
Now Mark - a former tin miner who also served in the Royal Navy - has defended the policy, which is outlined in notices inside the eatery

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Now Mark – a former tin miner who also served in the Royal Navy – has defended the policy, which is outlined in notices inside the eateryCredit: Neil Hope
The food the customers left on their plates

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The food the customers left on their platesCredit: Star Inn Vogue

He hit back at a customer who tried to shame him online after they were charged an extra £2.40 because they piled their plates high at the £12 all-you-can-eat carvery – but ate barely any.

Verity Farmer, who shared her experience on Facebook, said: “Just been for a Sunday carvery at The Star Inn, Vogue, St Day.

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“We paid for our meal at £12 each, and when we got our bill it had got an extra £4.80 added.

“When questioned about it they said it was a charge for not eating all our meal. I’ve never heard anything like that before.”

Her post prompted nearly 400 comments in less than 24 hours, with The Star Inn’s social media page among those replying.

It said: “We just try and make sure there is enough food for everyone.

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“I’m sure if you were a customer later on in the day and I had to tell you I had no food left for your booking because it had all been wasted and gone in the bin you would not be very happy and would have made another social media post too.”

Now Mark – a former tin miner who also served in the Royal Navy – has defended the policy, which is outlined in notices inside the eatery.

He says it is the first time in 20 years he has enforced the rule – and only did so after the two diners told him they had enjoyed the meal.

Mark shared a photo of the leftover food on social media and insisted the nominal charge would only cover the raw ingredients they left but not the equipment, staff or energy.

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He said: “I’m not strict but I’m a straight talking Cornish landlord. Ask anybody who comes in for a meal, I’m an easy-going Cornish boy. I tell people ‘fill your boots, have as much as you like, as long as you eat it’.

“When young children come in with their parents we say don’t buy them a meal, we give them an empty plate and say share some of yours and come up if you want more, as long as you eat it.

“We keep it at £12 for a large or £8 for a small because we are a local village pub trying to help the community, we use a local butcher and greengrocer.

“We do as much as we can to keep our prices down but if everybody behaved like these ladies I’d have to put the prices up.

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“I think the ladies wanted to shame me because they have been charged, to be honest I think they are just entitled people who believed they would get all the support.

“They tried to say they had only left a few potatoes so they weren’t completely truthful.

Mark says it is the first time in 20 years he has enforced the rule - and only did so after the two diners told him they had enjoyed the meal

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Mark says it is the first time in 20 years he has enforced the rule – and only did so after the two diners told him they had enjoyed the mealCredit: Neil Hope
Mark Graham of The Star Inn, Vogue, was forced to defend his policy

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Mark Graham of The Star Inn, Vogue, was forced to defend his policyCredit: Neil Hope

“People on Facebook were saying why not just put the prices up and let people leave what they want, well I keep the price down low for everybody and I’m not going to change that for a few idiots.”

Mark said the pub has deep ties with the local area, hosting the community library, installing floodlights in his field so the village football team can train for free, and hosting 20 different groups from a knitting circle to a motorcycle club.

He said: “We’re a little family run village pub and we want to keep everybody happy, the pub is the hub of this community.

“It’s hugely frustrating because it’s all you can eat, with a normal meal we’ll give you boxes and doggy bags because it’s your food, you’ve paid for it and you can take it away.

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What charges can pubs impose on customers?

Pubs can charge customers for a number of things, including:

Prices for food and drink

These must include VAT if the pub is VAT registered, and any compulsory service charge.

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Service charge

These are optional and can be left to the customer’s discretion, or added automatically to the bill.

If a service charge is added in this way, the venue must clearly display this on the price list or menu.

Cover charge

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A flat charge per person or table is often called a “cover charge”.

If applicable, this cost should be displayed as prominently as other prices on the menu or price list.

Minimum charges

Pubs can also impose a minimum charge per customer.

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“With all you can eat the margins are very fine, if everybody piled two meals on a plate and threw one away by the time the later people came in all the food is in the bin because it’s been wasted, it all goes downhill from there.”

Mark was also backed by locals including pensioner John Tozer, 79, who has been a regular at the pub for 40 years.

He said: “He’s a brilliant landlord, I think he was absolutely in the right to charge those ladies.

“You see people pile up their plates like Mount Everest then they can’t eat it, then at the end of the day people come in and there isn’t any left because of other people’s greed. It bloody annoys me.”

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Mark and his pub have previously hit the headlines after fashion giant Vogue threatened to sue him.

Condé Nast, the owner of Vogue magazine, sent a ‘cease and desist’ letter ordering him to stop using the name ‘Vogue’ as it is their name – even though the pub is more than 200 years old and the village is older still.

The publishing giant later backed down and apologised, admitting it didn’t do its homework.

Mark was also backed by locals including pensioner John Tozer, 79, who has been a regular at the pub for 40 years

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Mark was also backed by locals including pensioner John Tozer, 79, who has been a regular at the pub for 40 yearsCredit: Neil Hope
Mark hit back at a customer who tried to shame him online after they were charged an extra £2.40

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Mark hit back at a customer who tried to shame him online after they were charged an extra £2.40Credit: Neil Hope

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Russian spies plan ‘mayhem’ on British streets, warns MI5 chief

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Russian spies are on a “mission to generate mayhem on British . . . streets” while Iran has been fomenting lethal plots against the UK at “an unprecedented pace and scale”, the head of Britain’s domestic intelligence service has warned.

Instances of spying against the UK by other states rose by half over the past year, MI5 director-general Ken McCallum said on Tuesday, with the range of threats facing the UK “the most complex and interconnected . . . we’ve ever seen”.

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The number of aggressive state actions investigated by MI5 had “shot up” by 48 per cent in the previous 12 months, he said, and the agency had responded to 20 potentially lethal Iran-backed plots since January 2022.

“MI5 has one hell of a job on its hands,” McCallum said in his annual threat assessment. Alongside its counterterrorism work, which has continued at a more or less steady level for the past five years, MI5 was having to confront “state-backed assassination and sabotage plots, against the backdrop of a major European war”, he added.

McCallum said MI5 had so far not seen the rising conflict in the Middle East lead directly to increased terrorism incidents in the UK.

“We are powerfully alive to the risk that events in the Middle East trigger terrorist action in the UK,” but “we haven’t — yet — seen this translate at scale into terrorist violence”, he said.

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Nonetheless, radicalisation stemming from recent events in the Middle East was a “slow burn” process, McCallum cautioned, adding that established groups such as Islamic State and al-Qaeda had “resumed efforts to export terrorism”.

McCallum said the return of these groups was the “terrorist trend that concerns me most”. Over the past month, more than a third of MI5’s highest-priority investigations were linked to organised overseas terrorist groups.

Another development is that one in eight terrorists now being investigated in the UK are minors recruited online. MI5 had seen a “threefold increase” in investigations of under-18s in the past three years, driven by far-right terrorism that skews “heavily towards young people, driven by propaganda that shows a canny understanding of online culture”.

However, it is state threats that have undergone the biggest rise, not least by Russia. Britain’s decision to expel 750 Russian diplomats had “put a big dent” in the Kremlin’s ability to cause damage in the west, as “the great majority of them” were “spies”.

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Denying diplomatic visas to new Russian agents by the UK and its western allies was “not flashy, but it works”, he added.

The expulsions forced Russian spies such as its GRU military intelligence unit to use proxies, including private intelligence operatives and criminals.

McCallum said this had reduced the usual professionalism of Russia’s spy services and increased MI5’s “disruptive options”, as the proxies were not covered by diplomatic immunity.

Nevertheless, the UK’s “leading role in supporting Ukraine means we loom large in the fevered imagination of Putin’s regime”, McCallum said, adding that “we should expect to see continued acts of aggression here at home”.

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“The GRU in particular is on a sustained mission to generate mayhem on British and European streets . . . arson, sabotage and . . . dangerous actions conducted with increasing recklessness,” he said.

Iran has also stepped up its recruitment of criminals — from international drug traffickers to low-level crooks — to serve as proxies for Tehran’s espionage operations in the UK, mostly against dissidents.

Since January 2022, “we’ve seen plot after plot here in the UK, at unprecedented pace and scale”, said McCallum.

He described the counter-intelligence work of detecting criminals who are recruited online by hostile states, such as Russia or Iran, as being similar to spotting would-be terrorists recruited online by overseas radicalisers.

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“It’s a familiar challenge,” he said, and “we’ll keep finding them.”

Nevertheless, the rise in threats facing the UK, which includes confronting technological theft and high-level espionage by China, means that “things are absolutely stretched”, said McCallum.

The decisions MI5 now had to take on how to prioritise its finite resources “are harder than I can recall in my career”, he said. It had also meant that “our lower-level bar has had to rise” — a tacit warning that some potential threats might go uninvestigated.

“We can’t always draw the right conclusions from tiny clues,” said McCallum. 

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