EasyJet shares fall nearly 5% after first-half loss widens

The British government’s long-term borrowing costs were higher, with the 30-year gilt yield set to close at its highest level since 1998.

The 30-year gilt yield was up over 5 basis points to 5.573% at 2:40 p.m. in London, the 20-year gilt was over 4 basis points higher to 5.451%, while the 10-year gilt was flat at 4.762%.

U.K. borrowing costs have risen off the back of the U.K.-EU post-Brexit deal on Monday, in which the two sides signed an agreement covering a number of matters including security, energy, trade, travel and fisheries.

— Sawdah Bhaimiya

British mobile and broadband provider giant BT saw its full-year profit through to the end of March inch higher, citing strong demand for its fiber network and a £900 million ($1.2 billion) cost-cutting drive.

BT reported yearly revenue of £20.4 million, down 2% on difficult trade conditions as well as weaker handset sales. Despite the decline, core profit was up 1% to £8.2 billion, mainly due to its substantial cost savings strategy. Meanwhile, cash flow was up 25% to £1.6 billion.

Its fiber network reached 18 million homes and businesses, with quarterly net adds surpassing 500,000 for the first time, and 6.5 million premises now connected. Meanwhile, the company said its total workforce had been reduced by 3% to 116,000 and it is aiming for a headcount of 75,000 to 90,000.

“Although revenue declined year-on-year driven mainly by lower international sales and handsets, strong cost control and a step-up in focus and transformation resulted in growth in both EBITDA and normalised free cash flow,” BT CEO Allison Kirkby said in the report.

For the 2026 fiscal year, BT is forecasting £20 billion of revenue and £8.2 billion to £8.3 billion of core profit. It expects to achieve a cash flow of £2 billion by 2027 and £3 billion by the end of the decade.

— Sawdah Bhaimiya

Some investors are now looking to diversify away from the greenback, UBS‘ president for Asia-Pacific said, as volatility continues to grip markets in the wake of the White House’s protectionist trade policies.

“Generally, there is clearly momentum around diversifying away from the U.S. dollar, we’ve seen that of late,” Iqbal Khan told CNBC’s Martin Soong. “We need to watch the currency space as much as we need to watch the rates space.”

His comments echo similar views from the European Central Bank, which noted in its Financial Stability Review out earlier on Wednesday that a “fundamental regime change” could be afoot as investors reassess the risks inherent in U.S. assets.

— Ruxandra Iordache

Italy’s Banco BPM has criticized as “abnormal” a late-Wednesday decision by Italian market regulator Consob to suspend for 30 days a takeover bid for the bank launched by domestic rival UniCredit.

Banco BPM had rejected the $10.5 billion purchase offer in November, while Italian regulators in April issued a spate of conditions for UniCredit to march ahead with its proposal. UniCredit has since requested time to “clarify the content of the measures, which remains unclear,” according to a CNBC translation of the Consob notice.

In CNBC-translated comments, Banco BPM said the suspension is “particularly serious,” noting that UniCredit would have contemplated the possibility that Italy’s Golden Power legislation — which allows Rome to intervene or set conditions on foreign and domestic corporate takeovers in key sectors, including banking — could lead to additional requirements for the takeover transaction.

— Ruxandra Iordache

It’s ten minutes after the opening bell, and European markets are trading in negative territory.

The pan-European Stoxx 600 index is 0.5% lower, with almost every sector in the red.

Looking at regional bourses, the German DAX and French CAC 40 are both down by around 0.5%, while London’s FTSE 100 has shed 0.4%.

— Chloe Taylor

EasyJet reported a loss for the first six months of the year, but said current bookings indicate it will meet expectations for full-year profit.

The airline said it made a pre-tax loss of £394 million ($529 million) for the first half of the year, compared with a £350 million loss for the same period in 2024.

The company’s shares were down 3% at 08:10 a.m. London time, shortly after the market open.

CEO Kenton Jarvis described the first half — normally a quieter period for airlines — as an “interesting time.”

“In the first half, we have two quarters. The first quarter is the October through to December, and in that quarter, we actually performed very well,” he told CNBC’s “Squawk Box Europe” on Thursday.

“Now in the second quarter, where we did make a slightly larger loss, that’s the period where airlines ramp up … In this quarter, we made important capacity investments and flew further, which helped drive productivity, and that helped reduce our unit costs during the half. But the routes themselves will need a little time to mature, and therefore needed some revenue stimulation.”

Jarvis also cited capacity strains affecting all airlines — as both Airbus and Boeing fail to meet their original aircraft delivery schedules — but stressed that “demand is there.”

EasyJet said that current bookings mean it was confident it will meet forecasts and report a profit for this financial year.

“Demand looks good for the summer. As you said, our book position for both our third quarter, which ends in June, and our fourth quarter, which ends in September, are ahead of where they were this time last year,” Jarvis said.

“We’re also seeing very positive bookings in our holidays division, where we’re expecting something like 25% passenger growth year-on-year. So demand is looking good for the summer at the moment, and supply is relatively constrained.”

— Katrina Bishop

Deutsche Bank analysts downgraded British telecom group BT shares weeks ahead of its fourth quarter results, citing the 17% rally in its share price this year.

BT shares “have proven even more defensive than peers at a time of trade war confusion, a weak economy and GBP strength, despite Openreach line losses,” said Deutsche Bank’s Robert Grindle in a note to clients that downgraded the stock to a “Sell” rating.

The analyst cautioned investors that the company still faces fundamental challenges, such as new competitors taking market share. Grindle acknowledged that Bharti, one of India’s largest telecom operators, taking a stake in the company has added positive sentiment to the stock.

Analysts at UBS expect the most upside for British Land following its fourth quarter results, compared to its peers, Great Portland Estates and Land Securities.

“This ultimately stems from the continued strong performance we’ve seen from the retail warehouse sector, and our expectation that their City office exposure will likely produce a strong beat on the underlying market benchmark numbers,” said UBS analyst Zachary Gauge in a note to clients on May 15.

 — Ganesh Rao

Good morning from London and welcome to CNBC’s live blog covering the latest action in European markets as well as business news, analysis, earnings and data.

Here are the opening calls on Thursday:

European markets are expected to open lower, with London’s FTSE seen opening down 43 points at 8,739, Germany’s DAX 135 points lower at 23,984, the French CAC 40 down 48 points at 7,865 and Italy’s FTSE MIB down 251 points at 40,331, according to data from IG.

— Holly Ellyatt

There are a couple of big earnings reports and data releases to look out for on Thursday:

Earnings are set to come from EasyJet, BT, British Land and Tate and Lyle on Thursday. Preliminary purchasing managers’ index data will be released for France and the U.K.

CNBC will also be bringing you interviews from the Barclays leadership conference, focusing on energy, geopolitics and sector-specific challenges.

— Holly Ellyatt

European markets are expected to follow their global counterparts lower on Thursday as concerns grow over the U.S.’ deepening budget deficit.

Asia-Pacific markets fell overnight, tracking declines on Wall Street as investor sentiment soured on fears that a new U.S. budget bill could substantially add to the country’s debt.

U.S. stock futures were flat in overnight trading after markets stateside saw a sizable sell-off Wednesday as worries about a ballooning deficit deepened.

In regular trading, the blue-chip Dow slid more than 800 points, while the S&P 500 finished the day 1.6% lower. Equities were pressured by a sharp spike in Treasury yields amid concerns that a new U.S. budget bill would put even more stress on the country’s already large deficit.

The rocky negotiations on Capitol Hill over tax and federal budget changes have become a fresh worry for investors after tariff headlines subsided.

— Holly Ellyatt, Yun Li, Lee Ying Shan