UK growth slows, but manufacturing growth beats forecasts - as it happened
All the day's economic and financial news, including signs that the UK economy weakened last December, before picking up again
- Latest: UK GDP only up by 0.3% last quarter
- Burberry takeover talk probably unfounded
- UK manufacturing beats forecasts
- Shanghai stock market loses 1%
- Tory MP: Mark Carney should consider his position
4.38pm GMT
And finally...the European stock markets have closed slightly higher, as all eyes turn to tomorrow's European Central Bank meeting.
We believe the ECB will cut its deposit rate from -0.3% to -0.5% and expand its bond-buying program, as the pressure for it to act ramps up amid recent financial turmoil and sluggish growth in the euro area's main economies."
As John Cleese observed in 'Clockwise', it's not the despair that gets you, it's the hope. Traders have learned the wisdom of that observation over the past three days, as stock markets continue to oscillate in relatively tight ranges. In one sense, this is due entirely to the ECB - no one wants to get caught out with aggressive positioning ahead of a potentially decisive meeting tomorrow. Either that, or we are simply having to endure the inevitable consolidation period that follows a significant rally.
Either way, most investors have opted to sit on their hands. At least now we have fewer than 24 hours to go until we know Mario Draghi's mind.
3.50pm GMT
Britain's growth rate has dropped to just 0.3% in the last three months, according to the latest research from The National Institute Of Economic and Social Research (NIESR).
NIESR estimated that growth weakened in the December-February quarter, down from the 0.4% seen in November-January.
It looks as if output growth at the start of 2016 has been subdued.
However, it appears that December 2015 may have been a low point for GDP and as this drops out of the calculation of quarterly growth rates, output growth for the first quarter may strengthen slightly."
#NIESR #UK GDP estimate for 3 months to Feb down to 0.3%. Mirrors weak PMIs, lowest since early 2013. Brexit ref not coming at good time...
3.38pm GMT
Back in parliament, Steve Baker MP has accused the Bank of England of being at "sixes and sevens" over the Brexit issue, following Clara Furse and Richard Sharp's testimony today.
Neither of today's @bankofengland FPC re-appointees listed Brexit as a risk to financial stability in their reappointment questionnaires...
3.20pm GMT
Anti-austerity protests are also underway in Athens this afternoon, against the economic reforms contained in the Greek bailout.
Two former government ministers who broke away from the government last summer, Panagiotis Lafazanis and Dimitris Stratoulis, are taking part:
Greek former ministers lead anti-EU protest https://t.co/69yg81xE2A pic.twitter.com/HseetzvmTf
3.04pm GMT
The Treasury committee is now examining Richard Sharp, ahead of his reappointment to the FPC.
Like Dame Clara Furse, Sharp has neglected to mention Brexit in his homework.
There are clearly issues around the Brexit situation.
We have seen them manifest themselves in the foreign exchange market, but I don't consider them to be fundamental financial stability issues for this nation.
2.41pm GMT
Over in parliament, Bank of England policymaker Dame Clara Furse has agreed that the possibility of Britain leaving the EU is a threat to UK financial stability.
It is clearly true that any significant uncertainty is likely to create disruption, and that disruption creates risks. It also creates opportunities, but it creates risk. And in the short term, that seems to be the case.
"I shall think more carefully next time I put in a written submission".
2.15pm GMT
Over in France, transport unions and youth groups have been holding demonstrations and a strike against the government's labour reforms.
Crowds took to the streets in scores of cities to protest against proposals to amend France's 35-hour working week.
Outside the Helene Boucher high school, students cheered any mention of how the movement would prevent Hollande and the government from passing the bill.
Maryanne Gicquel, a spokesperson for the FIDL student union, described young people's journey towards a stable job as "a succession of internships and poorly paid jobs".
1.48pm GMT
The Wall Street Journal has a good take on the Burberry takeover bid that wasn't.
Saabira Chaudhuri writes:
Who is the mystery Burberry Group investor? There isn't one.
The takeover speculation that drove the British luxury retailer's shares 6.6% higher on Tuesday turned out to be mistaken, according to a person familiar with the matter, sending the stock tumbling in Wednesday trading.
Burberry takeover talk eases as light is shed on mystery investor https://t.co/QwULvMqLwl
1.40pm GMT
Shares in Burberry have slumped by over 5%, as the takeover talk that gripped the City yesterday deflates.
That wipes out all yesterday's rally:
1.24pm GMT
Rumours that fashion house Burberry might be facing a takeover battle appear to be unfounded.
One person close to Burberry said the company was informed on Tuesday that the unusual surge in HSBC holdings was "business as usual trading" and described the nature of the investors as "institutional".
Another person said it was "multiple" investors. Burberry and HSBC declined to comment.
HSBC's Burberry holding for multiple clients https://t.co/kvDUExzQLq
12.59pm GMT
More well-heeled readers can cancel their private jet orders, because Michael O'Leary has got them covered.
His budget airline, Ryanair, has today announced plans for a new corporate jet operation, as my colleague Julia Kollewe explains:
The budget airline will offer fine dining on a Boeing 737-700 jet refitted to seat 60 passengers on reclining business class seats. A spokesman said the plane can be hired by the hour, with the "competitive" rate depending on the arrival and departure airports.
Ryanair said the jet would be "ideal for private corporate, sports team or group travel". Asked if Ryanair would accept booking from stag and hen dos, a spokesperson said the carrier was "happy to provide quotes for any groups".
Related: Ryanair launches corporate jet service
12.44pm GMT
The Economist Intelligence Unit is gloomier about China today, following dire-looking trade date earlier this week:
We cut our China growth forecast to 4.3% by 2020 (4.7% previously). Odds of hard landing have risen to 40%. pic.twitter.com/gK7P4lLXsC
12.01pm GMT
Wall Street shares are expected to rise when trading begins, at 2.3opm GMT/8.30am East Coast time.
US Opening Calls:#DOW 17061 +0.57%#SPX 1992 +0.66%#NASDAQ 4294 +0.68%#IGOpeningCall
11.59am GMT
After a subdued start, European stock markets are now positive, partly thanks to the rise in UK manufacturing output.
Here's the situation:
It is interesting that the French index kept in-step with its German counterpart, since the Banque de France cut its growth forecasts to 0.3% for the quarter this morning following a factory sentiment slump.
Arguably, however, that news merely puts more pressure on Mario Draghi ahead of tomorrow's meeting, investors hoping for a multi-faceted approach to stimulus (and not a damp squib like last December) from the region's central bank.
11.49am GMT
The oil price is pushing up this morning, following reports that crude producers are planning a meeting.
Brent crude has gained 1.7% to $40.34, after an Iraqi oil official told state newspaper Al-Sabah that OPEC and non-OPEC members are going to gather in Moscow. They could potentially discuss freezing output.
11.01am GMT
Mike Ashley, the boss of Sports Direct, has been ordered to testify to the House of Commons over the company's treatment of its staff.
I am writing on behalf of the Business, Innovation and Skills Select Committee to establish whether you will accept the Committee's invitation to give evidence to it at Westminster.
The Committee would like to hear about the action that you have taken in response to reports in the media about the treatment ofworkers at Sports Direct and about the scope, progress and timetable of your own review of working practices that you announced in December. The treatment of low paid workers and enforcement of the national minimum wage are issues that the Committee will be keeping under review over the coming months.
Mike Ashley avoided appearing at Committee last year claiming he wasn't free until parliament dissolved. This parliament has 4 years to go..
[Parliament's] power to punish non-members for contempt is untested in recent times. In theory, both houses can summon a person to the bar of the house to reprimand them or order a person's imprisonment.
10.38am GMT
Unions have warned that British workers are getting a raw deal, after the number of people on zero-hours contracts jumped again.
New government figures show that 801,000 people were on contracts that don't guarantee a minimum number of hours work each week. That's up from 697,000 six months earlier.
Number of people on zero hours contracts rises 15% to 801,000 last year, with more than one in three on them wanting more hours - ONS
Zero-hours contracts seem pretty entrenched in UK now - not fading as labour market tightens. Now 2.5% of workforce, up from 2.3%.
"Zero-hours contracts may be a dream for cost-cutting employers, but they can be a nightmare for workers.
Many people on zero-hours contracts are unable to plan for their future and regularly struggle with paying bills and having a decent family life.
10.18am GMT
British manufacturers did extremely well to boost output by 0.7% in January, given the global turmoil.
So says Mark Stephenson, UK manufacturing industry leader at Deloitte:
"The challenges UK manufacturers are up against should not be underestimated. Slow global economic growth, weak Chinese trade data, downgraded UK growth forecasts, turmoil in the steel industry and the PMI at its lowest point for almost three years, are just some of the factors at play.
"Therefore today's manufacturing output figures show how resilient the industry is and signals the prospect of a more positive year ahead for UK manufacturers. This week's EEF survey highlighted that firms expect modest growth in the coming months, and a weakened pound should boost many exporters."
10.06am GMT
This rather retailed chart confirms UK manufacturing picked up in January, while the mining and energy sector was notably weak:
9.59am GMT
Britain's manufacturing sector has burst back to growth.
Manufacturing output rose by 0.7% month-on-month in January, according to the new report from the Office for National Statistics.
Given fresh concerns over what a potential Brexit could do for large UK corporate companies, the strong recovery seen this morning for January's Manufacturing Sector - recording 0.5% above analyst forecasts - will be a huge relief and welcome news for Bank of England governor Mark Carney.
9.32am GMT
The gloom swirling over France has darkened this morning.
Sentiment among factory executives dropped to 98 in February from 101 in January, its biggest decline since January 2013, according to a monthly survey from the central bank.
As a result, the economy will expand 0.3% this quarter instead of 0.4%, the Bank of France said on Wednesday.
9.11am GMT
The political storm swirling over Bank of England governor Mark Carney has intensified this morning, with one MP suggesting he should consider resigning.
"He was speculating, and speculating in a way that I say is wholly unbelievable. It seemed to be part of the Project Fear. I guess it was orchestrated by conversations either with the Chancellor or the Prime Minister.
"If the governor had speculated that way that we should come out of the EU, do you think Downing Street wouldn't be clamouring for his head at the moment?"
8.48am GMT
Insurance firm Prudential has just cheered the City by announcing a 22% jump in operating profits.
Investors are going to be quids in -- the Pru is raising its dividend by 5%, and paying a special divi of 10p as well.
Prudential CEO tells @CNBCi China and Asia in general are mis-read by the West.
Prudential CEO tells @CNBCi structural demand for markets across Asia is intact.
8.40am GMT
European stock markets have made a mixed start to trading, after seeing Asia hit a one-week low overnight.
UK restaurant chains Frankie & Benny's & Garfunkles pouring cold water on UK sentiment..."softening..consumer demand & weaker. confidence"
8.33am GMT
Despite the recent market turbulence, Britain's premier luxury chocolate maker has decided to float on the London exchange.
Hotel Chocolat is hoping to raise 50m by entering the AIM Market.
After yday's big news that chocolate makes you smarter... today Hotel Chocolat reveals it's going to float on Aim https://t.co/GJ7mcoRSiP
8.18am GMT
Kit Juckes, top foreign exchange strategist at French bank Socii(C)ti(C) Gi(C)ni(C)rale, has an interesting take on the state of the markets.
He told clients this morning:
I can't help reflecting that we're still living with the consequences of the twin bubbles - credit and commodities - that were unleashed by the Fed's absurdly easy monetary policy in 2003.
The credit bubble burst in 2008 and prompted even easier policy, as well as QE. That drove bond yields down and gave the commodity bubble a fresh lease of life, but when that too burst, we got commodity price deflation to go with the low yields and the result is they are even lower. Investors are left hunting for yield by buying emerging market or high-yield bonds as soon as there is any semblance of calm, but it's no surprise that the over-riding mood is so fragile.
8.13am GMT
There's thin gruel for investors in the Restaurant Group today.
Shares in the company have tumbled 15% at the start of trading, after it warned the City this morning that like-for-like sales are down by 1.5% so far this year.
The more challenging trading conditions we saw at the end of last year have continued into the early part of 2016, reflecting a softening in consumer demand and weaker overall consumer confidence.
Whilst still early in the year, our assessment is that this more challenging environment and recent trading patterns are likely to persist.
8.00am GMT
Germany's push into renewable energy has driven its utility giant E.ON into a record loss.
Germany is aiming to generate 80 per cent of its electricity from renewable sources, such as wind and solar, by 2050, up from around a quarter today.
But government subsidies for renewables have led to an increase in power generation which has caused wholesale prices to tumble, eroding profitability at the utility companies' coal and gas-fired power stations.
7.43am GMT
Worries over the Chinese economy have weighed on Asian stock markets overnight.
Yesterday's alarmingly weak trade data, which showed a 25% tumble in China's exports in February, hit many shares on the Shanghai stock market.
China stocks dropped more than 1% on Wednesday, snapping a six-session winning streak, as a tumble in commodity prices hit resource shares and prompted profit-taking amid signs of persistent lethargy in the economy.
The blue-chip CSI300 index declined 1.2%, to 3,071.91, while the Shanghai Composite Index shed 1.3%, to 2,862.56 points, registering their first losses in seven sessions.
7.26am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
There's a fragile feel in the air in the City today - along with a LOT of rain - after Tuesday's barrage of gloomy news.
The manufacturing sector has borne the brunt of the global economic slowdown over the past few months and once again the UK economy is in the cross hairs today with the latest ONS manufacturing and industrial production data for January.
December was an extremely disappointing month with sharp declines in both as 2015 came to a disappointing end. The expectation is for a rebound in January with a 0.4% rise in industrial production, and a 0.2% rise in manufacturing production
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