Sunday newspaper round-up: Election fallout, Brexit, insurers, energy companies, BP

Sterling, the market’s usual prism for viewing the UK’s departure from the European Union, fell 2% on Friday but the pound is still higher than it was on the morning of 18 April, the day Theresa May announced her fateful plan to go to the country to secure a stronger negotiating hand. Investors’ mood of semi-cheerfulness flows from the idea that May is now so weakened that she, or the next Tory leader, won’t be able to pursue a hard Brexit that seeks to take the UK out of the EU single market and customs union. - Observer

Former “remain” campaigners plan to stop Theresa May negotiating a hard Brexit, claiming her failure to win a majority gives parliament the right to take charge of the process by which Britain will leave the EU. Labour politicians have begun private talks about setting up an all-party parliamentary committee with the power to control the Brexit process from start to finish. - Sunday Times

After her election debacle left Brussels doubting that she could be trusted to negotiate Britain’s divorce, Theresa May has urged the EU to start Brexit talks early, in an attempt to show resolve, with the prime minister expected to make a “generous offer” on guaranteeing the rights of European citizens living in the UK as a sign of “goodwill” to start the talks. May instructed aides to send a note to EU counterparts on Friday evening to signal that her government was operational and negotiations should begin before the agreed date of June 19. - Sunday Times

Ruth Davidson has raised the prospect of her new group of Scottish Tory MPs torpedoing a hard Brexit as Theresa May found herself trapped between her party’s Leave and Remain supporters. The Scottish Conservative leader flexed her new political muscle in a hung parliament to warn that the Prime Minister’s Brexit blueprint needed to be “reopened” following Mrs May’s shock failure to secure a majority in last week’s General Election. - Sunday Telegraph

Households are facing a fresh squeeze on real income, as economists predict new falls in the pound following the General Election result. Figures out this week are set to show that Britons continued to see wages outstripped by inflation in May, with the Consumer Prices Index rising 2.7 per cent and average weekly earnings 2.4 per cent. - Mail on Sunday

Wobbly May, Corbyn eyes coalition

The Democratic Unionists’ deal to shore up a minority Conservative government will be sealed this week with the emphasis on an economic aid package for Northern Ireland and an assurance of no referendum on Irish unity. Ten DUP MPs are likely to help Theresa May form a new administration on a “confidence and supply” basis rather than the Ulster party joining in a formal coalition. - Observer

Theresa May was left isolated and undermined on Saturday night as the resignation of her two chiefs of staff failed to stop the furious Tory backlash over the election. The Prime Minister has been told by Cabinet ministers she must overhaul her leadership style and change her economic policy if she wants to remain in power. - Sunday Telegraph

Theresa May’s fate could be decided as early as Monday, after a showdown meeting with her backbenchers was brought forward. Graham Brady, the chairman of the influential backbench 1922 Committee, said he did not want MPs to have to wait until Tuesday for the crucial inquest with the Prime Minister. Backbenchers are also likely to demand to know why Downing Street announced that a deal was done for the Democratic Unionists to prop up the Conservatives in government – only to be forced to retract the claim overnight. - Independent

Boris Johnson has been pressed by five other members of the cabinet to oust Theresa May as prime minister as the Tory party descended into a new civil war. The foreign secretary was contacted by the ministers on Friday morning as the scale of the general election debacle was unfolding and told they would support him if he moved against May. - Sunday Times

Theresa May has been warned by Ukip's former chief donor Arron Banks that she should hand Nigel Farage a peerage and a government job on her Brexit negotiating team or face a relaunch of Ukip that will leach votes from the Tories at the next election. A source familiar with the discussion said senior figures in the Democratic Unionist Party, which is in coalition talks with May but has close links to Farage, would press for him to be involved in the Brexit negotiations. - Sunday Times

Jeremy Corbyn said Labour will invite parties to defeat the government and vote for Labour’s manifesto in a “substantial amendment” to the Queen’s speech, as well as suggesting the party would also kill off the ”great repeal bill”. “We are ready and able to put forward a serious programme which has great support in this country,” he said, though the Labour leader conceded his party “didn’t win the election”. - Observer

Labour leader Jeremy Corbyn said he could still become prime minister if the Conservatives’ Queen’s Speech was voted down in the House of Commons. “This is still on. Absolutely,” he said. On Sunday he promised to see through Britain’s departure from the EU if he gains power, adding that he would focus on negotiating tariff-free access as part of a “jobs-first Brexit”. - Sunday Mirror

Donald Trump has told Theresa May in a phone call he does not want to go ahead with a state visit to Britain until the British public supports him coming. The US president said he did not want to come if there were large-scale protests and his remarks in effect put the visit on hold for some time.

Theresa May must start Brexit talks as soon as possible and prove she is making progress with the EU if she wants to restore confidence among British businesses, the CBI and banks have urged. Investment could tumble following the general election as companies hold back on major spending plans at a time of intense uncertainty, while poorly thought-through schemes to intervene in businesses risk a “chilling effect” on the economy. - Sunday Telegraph

Leading bosses have called on the new Government to steer clear of a hard Brexit and to negotiate a transitional arrangement with the European Union while making an urgent priority of granting full rights to EU citizens in the UK. Paul Drechsler, president of the Confederation of British Industry, and Stephen Martin, director-general of the Institute of Directors, spoke out after the result of Thursday’s snap General Election was announced. They said they believed the Election provided a fresh opportunity for the UK to negotiate maximum access to the European single market. This internal market removes barriers to trade and allows the free movement of goods, capital, services and labour across Europe. - Mail on Sunday

Car finance, energy companies, SSE broadband

Legal & General is at the centre of a new Bank of England inquiry into overseas financial deals struck by Britain’s biggest insurers. Sam Woods, head of the Prudential Regulation Authority, summoned the chairmen of the largest insurers to a meeting last week. - Sunday Times

After sub-prime mortgages brought the economy to its knees last time, could it be sub-prime car loans that causes us to hit the skids this time? Cheap finance, the economic spectre of the age, has underpinned much of Britain’s growth over the past three years and there has been no bigger beneficiary of this debt-fuelled largesse than the car industry, with a record £31.6bn in car loans last year. - Observer

Energy giant SSE is exploring major investments in ultrafast broadband infrastructure, threatening a new challenge to BT and Virgin Media. The deep-pocketed utilities provider is working on the business case for laying new fibre optics to homes and businesses that would offer faster, more reliable internet connections than copper telephone lines or cable. - Sunday Telegraph

Fresh delays to the rollout of smart energy meters threaten to pile further costs on to Britain’s energy companies as they face the threat of an energy price cap from the new incoming Government. The latest delay to the multi-billion-pound Government-mandated scheme means even higher costs due to the tougher roll-out targets, at the same time as the expected crackdown on energy bills from the new Government begins to bite. - Sunday Telegraph

The Qatari conglomerate and Swiss investment firm considering a bid for struggling Co-operative Bank have hired Barclays to help them put together a potential rescue of the troubled lender. It is understood that bankers from Barclays are advising Al Faisal Holding and Interritus on their possible joint takeover of Co-op Bank, which is facing a race against time to shore up its financial position to avoid being wound down by the regulators. - Sunday Telegraph

Airbus has laid out a string of non-negotiable demands on Brexit, warning it may move production abroad if its terms are not met. Just days before the government is due to begin talks with the EU, the aerospace giant’s chief operating officer has set “minimum” conditions on free movement of workers, trade tariffs and regulatory conditions. - Sunday Times

One of the North Sea’s largest new oil fields will begin pumping its first oil within weeks, giving its small-cap operator a $700m (£549m) a year boon. Production at the Kraken field in the East Shetland basin could begin within days to bring a significant reversal of fortunes for EnQuest, which survived a major debt refinancing late last year. - Sunday Telegraph

BP is in talks with an AIM-listed oil explorer that could see it win its first toehold in Nigeria. City sources said the FTSE 100 giant is in advanced discussions with Sirius Petroleum about a so-called “off-take” agreement. - Sunday Times

The High Court has issued an injunction against Huawei that will require the Chinese mobile phone giant to pay licence fees to escape a ban on UK smartphone sales. In a ruling handed down last week, Huawei was ordered to pay royalties on the millions of smartphones it sells around the world to Unwired Planet, a US company that owns thousands of networking patents obtained from Ericsson. - Sunday Telegraph

The billionaire owner of Edinburgh Woollen Mill (EWM) is circling the struggling fashion chains Coast, Oasis and Warehouse, which have been put up for sale by their Icelandic owner. Philip Day, whose EWM empire has expanded by absorbing ailing brands such as Jaeger and Peacocks, is understood to be pursuing a deal for the three companies, which are being marketed together. - Sunday Times

Supercar maker McLaren Automotive could float within three to five years, according to its chief executive. The Woking-based company, spun out of the Formula One team seven years ago, made its fourth successive year of profits in 2016 after building about 3,200 cars. Mike Flewitt said continued success could set it up for a float. - Sunday Times