Lloyds warns of UK economic downturn; Musk predicts tough times for Tesla – business updates

### Manufacturing Output in Germany Expected to Decline in July

Recent data suggests that Germany's manufacturing sector may experience a contraction in July, as indicated by an initial reading of the purchasing managers’ index (PMI).

The preliminary PMI figure stood at 49.2, below the 50-point threshold that signals growth, though slightly higher than analysts’ forecast of 49, according to S&P Global.

Cyrus de la Rubia, lead economist at Hamburg Commercial Bank, which supports the survey, commented:

"The manufacturing sector's economic conditions remain unstable, with the PMI still below the expansion mark. However, the steady increase in production over the past five months offers some optimism.

"With export orders rising consistently for four consecutive months, we can expect further output growth. This trend has also led manufacturers to reduce layoffs at a slower rate. These signs collectively point to a gradual recovery in the industry."

### UK Car Production Hits Low, Raising Concerns

Business secretary Jonathan Reynolds has expressed serious concerns about the state of the UK's automotive industry following data revealing a significant drop in production. In the first half of 2025, output fell to its lowest level since 1953—excluding the pandemic-related shutdowns—declining by 12% to 417,200 vehicles, according to the Society of Motor Manufacturers and Traders (SMMT).

Reynolds told BBC Breakfast that the sector, which he referred to as a cornerstone of British manufacturing, is under pressure. He cited challenges from U.S. trade policies and rising competition from China as key factors.

"We’ve introduced several measures to support the industry, including adjusting energy costs for manufacturers through industrial policies," he said. "We also revised electric vehicle transition regulations from the previous government, negotiated trade agreements with the U.S., and launched incentives to lower costs for consumers purchasing UK-made electric vehicles."

Mike Hawes, SMMT's chief executive, described the period as "among the most difficult for UK automotive."

### European Markets Show Moderate Gains

The FTSE 100 rose by 0.6%, while other European markets saw mixed movement. France’s Cac 40 increased by 0.4%, Germany’s Dax surged by 1.1%, and Spain’s Ibex climbed 1.3%.

Deutsche Bank’s shares rose by 6% early Thursday, contributing to the Dax’s gains. Reports indicate the bank posted stronger-than-expected profits in the second quarter compared to last year, despite uneven performances in some areas.