Britain’s economy grew 4.8 percent in the second quarter, before the Delta variant spread.

Britain’s economy grew 4.8 percent in the second quarter, before the Delta variant spread.
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Britain’s economy grew 4.8 percent in the second quarter, before the Delta variant spread.

Britain’s economy grew 4.8 percent in the second quarter, before the Delta variant spread.

Daily Business Briefing

Aug. 12, 2021, 9:42 a.m. ET

Aug. 12, 2021, 9:42 a.m. ET

Lunching in London in June. Consumers spent heavily on restaurants, hotels and transport.
Credit…Tom Jamieson for The New York Times

The British economy grew 4.8 percent in the three months through June, from the previous quarter, as the vast majority of the country’s lockdown restrictions were lifted, the Office for National Statistics said on Thursday.

The economy swung back into growth after a strict winter lockdown, as consumers spent heavily on restaurants, hotels and transport. Retail sales also grew as shops deemed nonessential were allowed to reopen, the statistics agency said. At the end of the quarter, the recovery benefited from the euphoric mood that swept across the country as England’s national soccer team progressed through the Euro 2020 tournament, eventually making it to the final in July.

The education sector was also a major contributor to growth as in-school attendance rates increased. The production of cars was a drag on the economy for a second-consecutive quarter because the industry is still hampered by a shortage of semiconductors. But demand for cars went up when showrooms reopened, raising the price of used cars instead.

In June, gross domestic product edged up 1 percent, the statistics office said. But the overall size of the economy was still 2 percent smaller than it was before the pandemic in February 2020. The recovery briefly went into reverse in the first three months of 2021, when the economy contracted by 1.6 percent.

Recently, there has been evidence that some of this growth momentum has been lost. In mid-July, remaining social distancing restrictions were abandoned in England but the change was unlikely to have added much fuel to the economic recovery because, at the same time, the number of coronavirus cases was rising rapidly as the Delta variant spread. This kept most people working from home instead of offices. Economic indicators that seek to measure the pace of the recovery in real time, using restaurant reservations, credit card spending and retail footfall, have plateaued.

Earlier this month, the Bank of England predicted that in the third quarter the economy would grow by about 3 percent, slightly lower than its previous forecast, as people reduced how much time and money they spent shopping, dining and socializing, either because they were forced to self-isolate or because they were acting more cautiously.

But these factors will only temporarily alter the shape of the recovery. By the end of the year, the economy will have recovered to its prepandemic size, the central bank said.

Reddit, the virtual town square of the consumer internet, has raised a fresh $410 million in funding, valuing it at more than $10 billion, the company said on Thursday.

The financing, which was led by Fidelity Investments, increases Reddit’s valuation from the $6 billion it achieved six months ago, when it raised $250 million. Reddit said it expected existing investors to participate in the latest financing as well, so the round is likely to grow and close out at around $700 million.

The latest funding wasn’t planned, but “Fidelity made us an offer that we couldn’t refuse,” Steve Huffman, Reddit’s co-founder and chief executive, said in an interview.

The company then decided the capital would give it more time to decide on when — and how — to go public. “We are still planning on going public, but we don’t have a firm timeline there yet,” Mr. Huffman said. “All good companies should go public when they can.”

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The move gives Reddit more of a war chest to build its business and attract new users. The company makes most of its money selling advertising, which appears in the feeds of users who browse the many “subreddits,” or topic-focused forums, across the site.

But Reddit must compete against digital advertising giants like Google, Facebook and Amazon, as well as other ad-based social networking sites, including Twitter, Snap and Pinterest.

“We’ve grown up in the shadow of Facebook and Google, and pretty much every dollar we make we’ve had to fight for,” Mr. Huffman said.

Still, he said, the company’s advertising products have begun to work better. Reddit surpassed $100 million in revenue in a single quarter for the first time this year, up 192 percent over the same period in 2020.

More than 50 million people now visit Reddit daily, and the site has more than 100,000 active subreddits. While it previously had a laissez-faire approach to free speech, regardless of toxicity, Mr. Huffman has spent the past few years overhauling Reddit’s policies and making it more difficult for trolls to overrun the forums.

The company will use the new funds to improve product features, focusing on how to make it easier for newcomers to explore and quickly understand the site, Mr. Huffman said. Reddit is also enhancing its video products with an eye toward more advertising. And the company is building its self-service advertising system, which could help appeal to small and medium-size business marketers.

Reddit is also focused on expanding internationally. Most of the site is U.S.-centric, Mr. Huffman said — something he hopes to change.

“The first priority on the product is just making Reddit awesome,” he said. “We want to build what is best for new users, because over time it will be best for everyone.”

Vice President Kamala Harris has taken in active role in soliciting support for the Biden administration’s proposals.
Credit…Alex Wong/Getty Images

The day after Senate Democrats passed their “big, bold” $3.5 trillion budget blueprint, Vice President Kamala Harris is bringing business leaders to the White House to build support for one of the plan’s key pillars: child care, a White House official told the DealBook newsletter.

The budget, which aims to transform social policy in the United States, is still far from official, and the challenges to passing it became clear almost immediately, with Senator Joe Manchin, Democrat of West Virginia, saying he had “serious concerns” about spending so much. Ms. Harris, for her part, has taken in active role in soliciting support for the Biden administration’s proposals, including speaking with Unity Health Care’s Brentwood Health Center in Washington earlier this week and talking with members of Congress.

The Biden administration’s agenda on child care includes extending the enhanced tax credit to parents offered as part of the American Rescue Plan, which Columbia University researchers say could cut child poverty by 45 percent. It also calls for expanding various forms of paid leave, up to 12 weeks per year for parental, family care and medical leave, as well as three days of bereavement per year.

The meeting on Thursday underscores the administration’s efforts to get business on board, particularly on issues not traditionally viewed as business matters, though increasingly discussed as such. More than two million women have left the work force since the beginning of the pandemic, and companies, already scrambling to fill open positions, have struggled to bring them back. The share of women in paid work is at the lowest level since 1986.

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The invite list includes a wide range of business leaders, like Nathan Blecharczyk, a co-founder and strategy chief at Airbnb; Mark Breitbard, the chief executive of the Gap brand; Jenna Johnson, the president of Patagonia; Josh Silverman, the chief executive of Etsy; Brad Smith, the president of Microsoft; Hamdi Ulukaya, the chief executive of Chobani; and Alison Whritenour, the chief executive of Seventh Generation.

The White House selected those executives because of their companies’ policies on child care and paid leave, a senior administration official said. In the meeting, Ms. Harris is expected to emphasize the importance of child care as both a personal and business matter.

The United States is the only member of the Organization for Economic Cooperation and Development that does not have statutory paid leave for new parents. On Thursday, roughly 300 business leaders from companies like Salesforce and Spotify called for federal paid family leave. In a letter, they said that paid leave “leads to better retention, personal health, and improved morale, which contributes to greater stability and viability for our businesses, ultimately helping our bottom line.”

Elon Musk, the chief executive of Telsa, has been a longtime target of Carson Block, a short-seller who runs  the investment firm Muddy Waters.
Credit…Brendan Smialowski/Agence France-Presse — Getty Images

Much has been written about Carson Block, the short-seller who runs Muddy Waters, an investment firm that publishes research and bets against companies it thinks are overvalued. Now, Mr. Block is penning some words of his own, the DealBook newsletter reports.

Mr. Block just sent clients his first shareholder letter since starting a hedge fund in 2015. In the letter, obtained by DealBook from a source familiar with the fund, Mr. Block, a longtime critic of Elon Musk, Tesla’s chief executive, said that his firm’s multiyear bet against the electric carmaker had been sent to “heaven,” with no plans to revive it.

Mr. Block said Mr. Musk’s “narcissism” drew his disdain and stoked the belief that Tesla’s business would crater. But Mr. Block added that he underestimated Mr. Musk’s ability to raise capital in huge amounts, reinvent himself and captivate shareholders.

“The market cap, the luster, the élan of Elon, is still there,” Mr. Block wrote, in explaining why his bets against Tesla have gone away.

“Tesla is here not because it has scale in terms of manufacturing base or unit sales,” Mr. Block wrote. “It has scale because of its capital base,” he said of Tesla’s $700 billion market cap. He added:

One could look at Tesla’s market cap and think it’s fragile — that reality will shatter it. However, Tesla should be able to raise many billions before its cap becomes sub-scale — and keep in mind that Tesla equity raises tend to push the stock higher. (Those “dumb money” investors actually knew that capital base scale is what mattered all along.)

Negative publicity about short-sellers during the meme stock rally has cost hedge funds, Mr. Block wrote. His firm’s latest fund, which opened in February, raised only $30 million, or less than half of what he expected, because the “carnage spooked some investors.” Funds that bet against GameStop, AMC and other so-called meme stocks were hit with large losses when the shares of those companies soared.

Nonetheless, Mr. Block’s fund is up nearly 11 percent since it started, at a time when markets have been rising, which aren’t conducive conditions for outspoken short-sellers.

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  • Workers at a McDonald’s restaurant in Oakland, Calif., and the franchise owner are announcing a settlement after the workers said their employer provided them with masks made from the diapers in lieu of bona fide masks at the start of the pandemic last year. They were also given masks made from coffee filters, they said.

    As part of the settlement, the restaurant has agreed to enforce a variety of safety measures, including social distancing, contact tracing and paid sick leave policies. The settlement also calls for a management-worker committee to meet monthly to discuss compliance with the mandated measures and whether new ones are needed.

  • Lordstown Motors said on Wednesday that it will only begin “limited production” by the end of September and expects that to be the situation through the rest of this year.

    Lordstown said it had $366 million in cash on hand at the end of June and expected to have no more than $275 million available by the end of September unless it comes up with new financing. The company has burned through cash in the past six months, and it said it was considering making room to “accommodate additional manufacturing partners” at a 6.2 million-square-foot factory in Ohio that it acquired from General Motors.

    The company, which has yet to produce a truck, said it lost $108 million in the second quarter.

The New York Times said on Thursday that it would make a slate of newsletters available only to subscribers, including new offerings from John McWhorter, Kara Swisher and other writers.

The Times, which has produced free newsletters for 20 years, now has about 50 newsletters, which are read by 15 million people each week. Eleven of those will become subscriber-only, alongside seven new newsletters, said Alex Hardiman, The Times’s chief product officer.

“We have to make sure that we’re adding much more distinctive value to what it means to feel like you are a subscriber,” she said in an interview. “So a lot of the work now is about making sure that every single time you experience The Times as a subscriber, you know it and you feel it.”

The Times has been devoting more resources to converting readers of its apps and website into paying subscribers. The company has eight million subscriptions and 100 million registered users, who provide their email address but do not pay for a subscription, it reported in its most recent financial results.

Ms. Hardiman said Times readers who are not subscribers will still be able to read dozens of free newsletters, including The Morning and DealBook.

Existing newsletters that will become available only to subscribers include On Politics, Well, On Tech With Shira Ovide and Parenting, as well as newsletters from Opinion columnists. The change will start rolling out in early September, a Times spokeswoman said.

The seven new newsletters will be written by Peter Coy, a former Bloomberg Businessweek journalist; Ms. Swisher, a tech journalist who writes and hosts a podcast for The Times’s Opinion section; Jane Coaston, the host of “The Argument,” a Times Opinion podcast; Tressie McMillan Cottom, a sociologist and writer; the cultural critic Jay Caspian Kang; Tish Harrison Warren, an Anglican priest; and Mr. McWhorter, an author and Columbia University linguist.

Kathleen Kingsbury, the editor of The Times’s Opinion section, said she had brought on board writers who would expand on the current expertise and coverage from Opinion columnists.

“We looked for diversity in all forms to round out the offering, so that readers found something that either touched upon one of their interests, was a voice that would intrigue them and surprise them, would offer challenging arguments,” she said.

Newsletters are experiencing renewed interest. Substack, a newsletter platform, has enticed big-name writers with six-figure deals to start their own subscription newsletters through the service. Facebook started its own newsletter subscription service, Bulletin, in June. Twitter acquired the newsletter company Revue earlier this year.

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