TheChek News Flow

Ministers on Tuesday announced the ‘final investment decision’ for the Suffolk project developed by EDF

Ministers and investors have given the green light to build the UK’s second new nuclear energy plant, in a move that should boost low carbon power supplies in the 2030s but will add immediately to consumer bills.

The UK government on Tuesday announced a “final investment decision” on the £38bn Sizewell C project due to be built in Suffolk, having secured investment from private groups.

The government will be the biggest single investor in the project, with an initial 44.9 per cent equity stake.

La Caisse will take 20 per cent, Centrica 15 per cent and Amber Infrastructure will take what is described as an “initial” 7.6 per cent stake. France’s state-owned utility EDF is taking 12.5 per cent.

The private investors will be protected from cost overruns and UK households will pay for the project via higher energy bills throughout construction.

Much of the cost is to be funded by loans. The government said it expects the “majority” of the debt finance to be provided by the UK’s National Wealth Fund. It has not yet set out full details of how the funding will be split between investors.

The government wants to revive Britain’s nuclear power industry and replace its ageing facilities, all but one of which is due to close by 2030. Nuclear power supplies about 15 per cent of Britain’s electricity.

Sizewell C is a sister project to Hinkley Point C, which France’s state-owned utility EDF is building in Somerset but which is running several years behind and over budget.

Ed Miliband, Britain’s energy secretary, said the government was “making the investment needed to deliver a new golden age of nuclear”.

Centrica’s chief executive told reporters on Tuesday that the Sizewell C deal means investors do not have any obligation to fund the project if costs rise beyond £47bn.

In that event, the government will either provide the further required funding or scrap the project and compensate the investors. If the project is built for less than £40bn, slightly higher than the project cost estimate of £38bn, investors will be rewarded.

Households will pay for the project via a surcharge on bills. The government said this would come to an average £1 a month throughout the construction of the project.

Such “regulated asset base” models are used to fund large infrastructure projects, since they lower overall project costs by reducing the risk for investors.

The expected £38bn cost of Sizewell C announced on Tuesday compares to an estimate of £20bn given by EDF in 2020 “including inflation and contingencies”.

Julia Pyke, joint managing director of Sizewell C, said the £38bn cost estimate followed “very detailed scrutiny of costs at [sister project] Hinkley Point C and long negotiations with our suppliers”.

Sizewell C, which will use EDF’s European pressurised water reactor technology, will have a total capacity of 3.2GW, potentially enough to power around 6mn homes.

Centrica said it expected the project to come online in 2035. The last nuclear power station to open in Britain was Sizewell B in 1995.

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The Magnificent 7 growth slowdown

The Magnificent 7

It’s officially earnings season for the Magnificent 7. We will see earnings for Alphabet and Tesla tomorrow, Amazon on Thursday, and Meta, Apple and Microsoft next week. To say it will be a big deal to the market is an understatement. The market’s three-month recovery has been driven by Big Tech:

From a market cap perspective, the Mag 7 is now 31 per cent of the S&P 500, also near an all-time high:

As Jason Pride at Glenmede points out, earnings growth should be strong this quarter — but not exceptionally strong. Big Tech’s annual earnings growth results have been flat or slowing for the past few quarters, and are expected to slow further in 2025 and 2026. We exclude Nvidia from the graph below, since its earnings growth in 2023 and early 2024 is too off the chart, but it has a similar pattern; we also excluded Tesla, as its earnings are all over the place and a clear outlier:

For the market and these companies, this is potentially a bad sign: over the past two years, investors have often punished Mag 7 stocks for earnings results that were great, rather than astounding. A further growth slowdown does not bode well. Here, for example, is Microsoft’s performance last year; we’ve called out how much the quarterly EPS in each release overshot Wall Street’s estimate. The stock only perked up with an 8 per cent beat, and fell on the rest:

In such an expensive market, it is completely fair to expect a lot from the priciest stocks. And, as Dec Mullarkey at SLC Capital Management astutely points out, part of the earnings growth slowdown is from normalisation to an increasingly high annual base.

Even so, Bank of America predicts the Magnificent 7 is only expected to keep its earnings growth edge over the rest of the S&P 500 for another 18 months:

That deceleration is concerning, especially for this year. But 18 months is still a long runway. And, thankfully, this is a two-sided story: the market expects a slowdown in earnings growth for the Magnificent 7 and a pick-up in earnings growth for the S&P 493. The Magnificent 7 should continue to grow in the low teens and may accelerate again in 2027, while the rest of the market will hopefully catch up. “[There is] a constructive aspect to this market,” said Kevin Gordon at Charles Schwab. “The last time the Magnificent 7 decelerated, the rest decelerated too, setting up the bear market of 2022. As long as breadth continues, we could get the best of both worlds.” 

A broader market, if we get it, will be an unvarnished good, so long as the big companies can continue to hold up the S&P 500 until then. Slowing earnings growth, and the high potential for bad guidance on tariffs and capex, will be a challenge.

BEIJING, July 22 (Reuters) - China needs to cut steel output from the coal-powered blast furnace process by more than 90 million metric tons from 2024's level to achieve its green steel target this year, researchers said in a report published on Tuesday.

WHY IT'S IMPORTANT

The global steel industry is responsible for around 8% of the world's carbon dioxide emissions and China accounts for more than half of global steel output.

If China could meet its target of producing 15% of steel from electric arc furnace facilities this year, it could cut CO2 emissions by more than 160 million tons, nearly equivalent to the European Union steel sector's carbon footprint, analysts at the Helsinki-based Centre for Research on Energy and Clean Air said.

BY THE NUMBERS

China has lagged far behind its global peers in terms of electric arc-furnace steel share. The average share is around 30% globally, 71.8% in the United States, 58.8% in India and 26.2% in Japan, the centre said.

From 2021 to the first half of 2025, China's blast furnace capacity utilisation rose from 85.6% to 88.6%, while electric-arc furnace utilisation fell from 58.9% to 48.6%, it added.

KEY QUOTE

"A credible strategy to curb emission-intensive production and rein in excess capacity would not only tackle the sector's structural issues but also ease global tensions," said Belinda Schaepe, an analyst at the Helsinki-based centre.

CONTEXT

China produced 1.005 billion tons of crude steel in 2024, with around 90% from blast furnace facilities.

China's steel sector has been plagued by overcapacity, which has depressed prices and sparked growing protectionist backlash from global trade partners amid its burgeoning steel exports.

The cleaner electric arc facilities have faced headwinds of high power costs, unstable scrap supply and growing losses.