Janet Yellen: US interest rate rise 'vote of confidence' in economy – as it happened
Federal Reserve predicts three US rate hikes in 2017, as it increases borrowing costs for the first time this year
9.20pm GMT
We've waited a whole year for the Federal Reserve to raise interest rates. And when the big day arrived, the shock result of last month's US presidential election rather overshadowed it.
"Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made and our judgment that that progress will continue.
It is a vote of confidence in the economy."
Understatement of the year. Janet Yellen says at her press conference: "We are operating under a cloud of uncertainty at the moment."
There may be some additional slack in labor markets, but I would judge that the degree of slack has diminished. So I would say at this point that fiscal policy is not obviously needed to provide stimulus to help us get back to full employment.
But nevertheless let me be careful that I am not trying to provide advice to the new administration or to Congress as to what is the appropriate stance for policy. There are many considerations that Congress needs to take account of and many bases for justifying changing fiscal policy."
"I would say it's very important not to roll back. There maybe some changes that could be made and we've suggested a few, like eliminating the burden of compliance with the Volcker rule or incentive compensation regulations for smaller banks or modestly raising the threshold for banks that are subject to enhanced credential supervision.
But I would urge that it's important to keep this in place."
"I do intend to serve out my four-year term. I haven't made any decision about the future. I recognize I might or might not be reappointed. It's a decision I don't have to make and don't have thoughts on at this time. As you said I recognize too thatI could stay on as a board member, and that's a decision for another day."
This is a very modest adjustment in the path of the fed funds rate, and involves changes by only some of the participants.
Janet #Yellen summary:
1. Economy looks good
2. Trump doesn't intimidate me
3. Wait & see on tax cuts/stimulus
4. Stocks are not in bubble
It is all over. Hawkish shift, change in messaging. Previous theories out of the window. Somewhat confusing. #Fed #Yellen #FedRateHike
#Yellen showed her political stripes today.. #FOMC @federalreserve refused to acknowledge @realDonaldTrump econ plan spurring markets higher
9.04pm GMT
You can take off the Dow 20,000 hats, folks.
Stocks close lower after Fed raises rates, eyes three hikes in 2017; energy and utilities drop 2%
https://t.co/L84rfA7ljp pic.twitter.com/L1nNC6nezm
8.57pm GMT
Here's Wall Street correspondent Rupert Neate on today's developments:
The US Federal Reserve on Wednesday raised interest rates for the first time in a year, and only the second time since the 2008 financial crisis. The US central bank also predicted three further rates increase in 2017, up from previous expectations of two rate hikes.
Janet Yellen, the Fed chairwoman, said "growth is a touch stronger, unemployment is a shade lower" as she announced a 0.25% increase in the benchmark rate to 0.50-0.75%.
Related: US Federal Reserve raises interest rates for second time since 2008 crisis
8.52pm GMT
Capital Economics are even more bullish than the Fed, and expects FOUR interest rate rises next year.
That's partly due to Donald Trump's plans for a fiscal stimulus package (even though Yellen argues that the labour market doesn't need the extra help).
As universally expected, the Fed today raised interest rates for the second time in this economic cycle, with that hike coming a full year after the first increase and more than seven years after the current expansion began.
With the economy much closer to full employment now and a strong likelihood of a fiscal stimulus next year, however, we expect the Fed to accelerate the pace of tightening next year, with one rate hike in the first half of next year followed by three in the second half.
8.44pm GMT
Dean Turner, Economist at UBS Wealth Management, says we shouldn't underestimate the importance of today's rate hike:
"While this was universally expected, we shouldn't forget that this is still a big milestone.
It marks only the second interest rate increase in a decade from the Fed. The Fed's anticipation of a faster pace of hikes (three next year vs two previously) and the nudge up in the long-run rate forecast to 3% shows that confidence in the growth outlook is increasing"
8.32pm GMT
Investors are also dumping US government debt, sending the interest rate (or yield) on Treasury bills higher.
Hawkish Yellen in one chart. US Treasury yields jump across the curve. pic.twitter.com/OZUa5r5SY3
8.31pm GMT
I"ll post a snap summary of Yellen's press conference next.
In the meantime, shares have fallen on Wall Street over the last 90 minutes as investors digest the Fed's rate hike and guidance for 2017.
8.24pm GMT
And finally, we get another question about the US election...
Q: Many people are angry about the economy, even though the aggregate performance levels seem pretty good. So are you reevaluating how you see the economy?
These are long-standing concerns. These are not new phenomenons, but the recession was very severe and probably exacerbated them.
Before somewhat abrupt exit, Yellen makes note of joblessness among blacks... healthiest since 2007, but still far above nat'l 4.6% pic.twitter.com/sY0bwSu0pq
8.15pm GMT
Q: virtually every economist expected a rate rise today - does the Fed need that level of certainty before taking the plunge?
Yellen says this is "not a prerequisite".
Yellen says markets pricing in a rate rise is "not a prerequisite" to allow the Fed to act.
8.08pm GMT
Q: You have been criticised by Donald Trump several times, so are you still planning to serve your full term, and would you like a second term?
Yellen must have known this would come up; and, smiling politely, she says she would still like to serve her full term (it expires in 2018).
Yellen: sees serving out 4-year term as important part of preserving independence of the Fed, keeping it off timing of presidential elex
Yellen (in response to @mckonomy): I plan to sit out my 4yr term. I could stay on as a board member, but that's a decision for another day
8.04pm GMT
Q: Did you discuss Donald Trump's economic plans at this week's meeting, and the effect that his victory has had on the financial markets?
Yellen reveals that the FOMC did indeed talk about this.
We are operating under a cloud of uncertainty at the moment."
Yellen says Fed is "operating under a cloud of uncertainty" after the election. No kidding.
8.01pm GMT
The next question is also about Donald Trump, and his pledge to scrap some financial regulation, such as the Volcker Rule (which stops banks making riskier bets with their own money).
Yellen launches a strong defence of the measures taken in recent years, saying:
We lived through a devastating financial crisis that took a huge impact on our economy.
7.57pm GMT
Q: What do you think about Donald Trump's tweeting, and his attacks on individual companies? (such as Boeing and Lockheed Martin)?
I'm not about to offer the president-elect advice, says Yellen.
"I'm a strong believer in the independence of the Fed." Yellen carefully stakes ground in question about @realDonaldTrump and Fed
7.55pm GMT
Hard to read this fiscal policy chatter from Yellen as anything other than "no, we won't accommodate your stimulus".
7.53pm GMT
Q: Why is it riskier to run 'hot' fiscal policy to strengthen the economy and drag more people into the labour market, rather than relying on monetary policy?
[Another question about Donald Trump's infrastructure spending ideas]
7.51pm GMT
Asked again about potential tax and spending changes, Janet Yellen says that there's no obvious need to change fiscal policy to get America back to full employment.
"I would say at this point that fiscal policy is not obviously needed to provide stimulus to get us back to full employment"-Janet Yellen
7.49pm GMT
Some snap reaction to today's press conference.
This is from Sky News's Ed Conway:
How odd. Janet Yellen avoiding the question of how the Trump tax cuts will impact the economy.
I'm getting notes in my inbox saying "Fed turns hawkish". Doesn't sound like it to me (as Yellen bends over backwards to downplay dot plot)
Yellen sounds like she really doesn't want us to describe the upgrade in fed funds rate projections as a Trump effect.
7.45pm GMT
Q: What will today's rate hike, and three more rate rises in 2017, mean for US families?
Yellen says today's interest rate rise reflects the Fed's confidence in the economic recovery. The economy has been remarkable resilient, she says, adding:
It is a vote of confidence in the economy.
7.43pm GMT
Q: Would tax cuts boost the productivity of the US economy? And how would the Fed react to new policies that improve productivity growth, or didn't?
Yellen says policies that boost education, improve the quality of capital, or encourage innovative new companies would all boost the productive potential of America's economy.
Yellen on helping productivity growth:
*workforce training
*more business investment, *innovation/competition/new business formation
7.40pm GMT
Onto questions:
Q: Why is the Fed now expecting three interest rate rises, not two? Is it because of the economy, or because of Donald Trump?
7.39pm GMT
Looking ahead, Yellen expects that the US economy will only warrant "gradual rate increases".
And then she touches on politics, saying that:
Changes in fiscal policy, or other policies, could potentially affect the economic outlook.
7.36pm GMT
Yellen rattles through the Fed's latest economic projections, before concluding that they are "very similar" to September's ones.
GDP growth is a touch stronger, unemployment is a shade lower, and inflation is unchanged, she declares.
7.35pm GMT
Over the past seven years, since the depths of the US recession, 15 million new jobs have been created, the Fed chair tells reporters.
On inflation, Yellen reminds us that consumer prices rose by an annual rate of 1.5% in October, up more than one percentage point over the last year. And core inflation (excluding fuel and food) came in at 1.75%..
7.31pm GMT
Janet Yellen begins by confirming that the Fed raised interest rates by a quarter point today, to 0.5%-0.75%.
She says that 2.25 million net new jobs have been created in the last 12 months, the labour market has improved, and inflation has moved closer to the Fed's 2% target.
7.30pm GMT
Janet Yellen has just arrived at today's press conference, to explain why the Fed has raised interest rates today.
Here's a live feed (I've also added it to the top of this liveblog)
7.28pm GMT
Donald Trump's plans for an aggressive fiscal spending plan have forced the Fed to predict faster rate hikes next year.
So argues Lee Ferridge of State Street Global Advisors:
"As widely expected the FOMC delivered the second rate hike in this cycle, precisely 12 months after its first move. However, in a major surprise it increased its expectations for the likely rate path in 2017 to three hikes rather than the two forecast following its September update.
It seems that in light of the forthcoming Trump fiscal stimulus plan and, signs of both rising price pressures and inflation expectations (helped by the recent OPEC decision to cut oil output) the Fed felt that it needs to adopt a more aggressive rate hiking path.
7.24pm GMT
Nancy Curtin, chief investment officer at Close Brothers Asset Management, says today's rate hike is a "vote of confidence" in the US economy.
But she also cautions that the economic outlook is still 'finely balanced':
Though unemployment is at a nine year low, wages and the participation rate have recently come in flat, which should give some reason for caution. The economy is not yet firing on all cylinders.
This trend will likely be observed closely in the New Year, particularly if inflation continues to run below its 2% target, and we might expect Yellen to look for more sustainable labour market improvements before further rises.
7.20pm GMT
Ian Kernohan, Economist at Royal London Asset Management, expects the Fed to tread cautiously, until Donald Trump has made his tax and spending plans clearer.
"Today's Fed rate hike was long anticipated, so there was no surprise when it came. Attention will now turn to the outlook for monetary policy in 2017. We do expect a sizeable fiscal stimulus to be announced next year; however the size and shape of that package may not be visible for some time.
"As a consequence, we expect the Fed to remain cautious on the pace of rate hikes, at least in the first half of next year. The post-election rise in the dollar and bond yields also adds weight to arguments for a cautious approach."
7.19pm GMT
Here's some snap reaction to the decision, starting with Michelle Jamrisko of Bloomberg who remembers how the Fed's forecasts were wrong last year:
#Fed says three interest-rate hikes for 2017. (Let's remember the same time last year they were projecting four for 2016.)
Federal Reserve hikes Fed Funds Range by 25bps to 0.50% to 0.75% as expected, 3 hikes for 2017 vs 2 prev. #Fed dots are hawkish. pic.twitter.com/WEKAm6ZKbH
Fed projections (today vs Sept) slightly more optimistic for GDP growth and unemployment in next few years; unchanged long-term.
7.19pm GMT
Here's the Fed's new dot plot - showing where its policymakers expect interest rates to be over the next few years:
7.14pm GMT
The dollar has strengthened, after the Fed's 'dot plots' predicted three rate hikes in 2017.
It has gained 0.6% against the euro, meaning a1 is now worth $1.056, down from $1.062.
Dollar rises after hawkish #Fed hike. #Euro drops below $1.06. pic.twitter.com/BFbsgadjaI
7.09pm GMT
Shares moved wildly on Wall Street as the Fed decision hit the wires, but things quickly calmed down.
The Dow Jones Industrial Average nearly hit 20,000 points, but is now up just 0.12% at 19,936.
Dow fluctuates after hawkish Fed hike, just 85 points shy of 20k. pic.twitter.com/MVLXCOxMLq
7.07pm GMT
The Federal Reserve says it has raised borrowing costs because the US economy has continued to strengthen.
In today's statement (online here), it explains:
Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined.
The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further.
Federal Reserve raises US interest rates from 0.5% to 0.75%. Statement: https://t.co/JjAh7FqOwt
7.03pm GMT
IMPORTANT: The Federal Reserve is also predicting that it will raise interest rates three times in 2017.
That's up from the two rate hikes expected back in September.
#Fed now sees three hikes in 2017, rather than two.
All's fine. Year's out.
7.00pm GMT
BREAKING: The US Federal Reserve has voted to raise American interest rates for the first time this year, and only the second time in a decade.
Borrowing costs are going up by a quarter-point, to 0.5%-0.75%. That's what Wall Street expected, and shows that the Fed is confident that the labour market is in solid shape.
6.45pm GMT
Just 15 minutes to go, until we get the most eagerly anticipated Fed decision of the year.
15 minutes until the Fed and all is calm in the markets... pic.twitter.com/2JMARda27V
6.44pm GMT
Michael Scanlon, managing director of Manulife Asset Management, agrees that the Fed's guidance on interest rate policy will be crucial today.
He says (via Reuters):
The most important thing that investors will be looking atis the interpretation of the commentary from the Fed.
I think the market is pricing in about two hikes for 2017 but if the Trump administration is able to reduce corporate taxes, I wouldn't be surprised to see four hikes next year."
6.37pm GMT
Colin Cieszynski of CNC Markets predicts that the Fed will be cautious about future rate hikes:
#FOMCGuesses I expect 0.25% hike but more important I think #Fed signals only 2 hikes for 2017 not the 4 hikes currently priced into #DXY
6.27pm GMT
The big question on everyone's lips is whether Donald Trump can resist the temptation to tweet about the Fed decision.
Currency expert Kathleen Brooks, of City Index, says we must watch Trump's twitter activity after the Fed meeting:
If Janet Yellen threatens to take away the punch bowl at his growth party could he throw his toys out of the pram, and tweet his displeasure? If he does, then this could cause major volatility in financial markets, and it could also be bad news for stocks, as it is likely to lead to questions about the Fed's independence from Presidential meddling in the coming years...
On the other hand, if Trump can keep himself away from his Twitter account this evening then this would send a positive message to the markets that he will respect the Fed's independence going forward, which could be seen as positive for markets.
One area where Yellen and Trump could clash is the Volcker Rule. This is one of the most controversial elements of Dodd-Frank regulation, which essentially bans banks from proprietary trading, and Donald Trump hates it.
How about Trump starting to tweet about interest rate & inflation in the midst of Yellen presser ? @TheStalwart @tomkeene @scarletfu
6.18pm GMT
Bloomberg's Carl Riccadonna reckons the Federal Reserve will deliver an "ambivalent hike" today.
A what?!
Forget "dovish hikes" and "hawkish holds" of meetings past, Fed to make an "ambivalent hike" amid elevated uncertainty related to Trumpomics
6.08pm GMT
Tension in building on Wall Street as investors brace for the Fed decision.
With markets seeing a rate rise as a foregone conclusion, there will be a significant focus upon the language and Fed projections which should shed further light on the 2017 plan.
6.02pm GMT
America's central bank is preparing to announce its final monetary policy decision of 2016 at 2pm EST (7pm UK time, or 8pm in most of Europe).
"I think too much is unknown. They're not going to involve themselves in that. They're going to do what they can do based on the economic evidence at hand."
First US rate hike in a year looks like done deal. Investors pricing in 92% chance Fed raises rate by 25bps, & 8% chance Fed raises by 50bps pic.twitter.com/WmSne4JUQt
5.46pm GMT
The chances of snap elections in Greece next year have risen, says Wolfango Piccoli of Teneo Intelligence.
He says the eurogroup's decision to suspend Greek debt relief puts prime minister Alexis Tsipras in a very difficult position.
If Tsipras goes ahead with the one-off payment to pensioners, this would further antagonize the EZ creditors, putting at risk the promised short-term debt relief. On the other side, giving in to the creditors' pressure would make Tsipras look amateurish at best, and at worst, further undermine his credibility and standing domestically. This would come on the back of a significant drop in popularity of his own SYRIZA.
This new spat between Greece and its Eurozone partners means that the conclusion of the second review will be further delayed. It also increases the chances of snap elections in Greece as after overplaying his hand and facing increasing difficulties in concluding the review, Tsipras may be tempted to cut his losses by calling early elections before SYRIZA loses more support for adopting unpopular measures.
5.32pm GMT
Back with Greece:
Tsipras on the offense: he wants MPs to vote tomorrow on the benefits to pensioners & islanders, by name! #Greece https://t.co/0DHMc3nDKs
5.23pm GMT
Markets paused for breath as investors awaited the Federal Reserve interest rate decision in less than two hours. An increase for the first time in a year is widely expected, but there will be more focus on what the Fed outlines in terms of future rises, not to mention any comments on the economy and the policies of president-elect Donald Trump. The final scores in Europe showed:
4.29pm GMT
Perhaps the news that Greece's lenders are putting debt relief on hold has not reached prime minister Alexis Tsipras. Or perhaps it has.
In any case he has now announced his government will extend a pilot programme to give 30,000 school children free meals come January, which may well add to the annoyance shown already by creditors over his plans for Christmas bonuses for pensioners. Helena Smith reports:
After announcing a one-off bonus for pensioners and suspension of a special sales tax on far flung Aegean isles, the leftist leader today turned to school children saying his government would ease the plight of those living in poverty-stricken areas of northern Greece. A pilot programme will, as of January, be funded from the government surplus to feed 30,000 school children living in those parts of Thessaloniki hardest hit by unemployment, he said. "This programme has been factored into the budget of 2017. It is worth around a11.5m," he said adding that wherever it had been enforced it had ameliorated the problem of malnourishment among young children and improved their performance at school.
Asked if the hand-outs would derail the adjustment programme Greece has agreed to enforce, Tsipras appeared in especially defiant mood.
4.06pm GMT
for those of you nostalgic for the days when all eurozone bonds rallied outside of Greece pic.twitter.com/zC2FAGV5EO
3.48pm GMT
Oil prices have recovered from the day's lows after the latest US inventory figures showed a bigger than expected dip in crude stocks.
In contrast with the American Petroleum Institute's figures on Tuesday, the Energy Information Administration said crude stocks fell by 2.6m barrels last week, compared with expectations of a 1.6m fall. But stocks at the Cushing, Oklahoma, delivery hub rise by 1.2m barrels. David Morrison, senior market strategist at Spread Co, said:
This data was at odds with yesterday's API update. This showed an increase in crude inventories of 4.7 million barrels for the week ending 9th December. This was way above the consensus expectation which was for a decline of 1.6 million barrels. In addition, gasoline inventories showed their biggest rise since January.
Crude has also been under pressure after OPEC released a report predicting that, despite promised production cuts, the oil market wouldn't rebalance until the second half of 2017. Earlier in the week the International Energy Agency (IEA) had forecast that supply and demand would be in balance in the first half of next year.
3.22pm GMT
Back with Greece:
#Greece FinMin official advises calm over freeze on short-term debt relief, says institutions have asked for more info via @capitalgr
3.17pm GMT
Some more positive news from the eurozone.
Italian prime minister Paolo Gentiloni won a confidence vote in the upper house of the Senate, allowing his coalition government to take office. Gentiloni replaced Matteo Renzi, who resigned last week after he lost a referendum on constitutional reform.
3.11pm GMT
The Greek stock market is down 2.9% following the news that lenders have put short term debt relief for the country on hold.
3.05pm GMT
Here's Reuters on the latest Greek debt developments:
Euro zone lenders have put on hold the implementation of a short-term debt relief deal for Greece on Wednesday after the Greek government proposed to make a one-off payout to pensioners in December, the euro zone bailout fund ESM said.
Euro zone finance ministers agreed on Dec 5 to grant Greece short-term debt relief that would reduce the amount of the country's public debt by 20 percentage points of GDP by 2060.
2.58pm GMT
And it seems that Greek prime minister Alexis Tsipras' plan to give struggling pensioners a Christmas bonus has riled the country's creditors, who had not agreed the deal.
The spokesman for the Eurogroup has just said there was no agreement now to implement the latest short term debt measures:
Statement on #greece pic.twitter.com/7kmVmf0eQJ
Greek 10 year yields rocket 20 basis points after EU creditor scrap plans for debt relief after Tsipras Xmas bonus pledge for pensioners pic.twitter.com/kdGFIi1oWr
2.54pm GMT
Over to Greece where tensions between Athens and the International Monetary Fund continue. As prime minister Alexis Tsipras prepares to meet his French and German counterparts later this week, speculation is mounting that he will ask the organisation to withdraw from the country's current bailout program. Helena Smith reports from the Greek capital:
Greece's relations with the IMF were never easy. The Washington-based institution has long been blamed fore the gruelling austerity visited on Greeks even when it wholeheartedly endorsed the cause of debt relief. But the latest spat may be a spat too far. Sources close to the Greek prime minister say in the wake of the fund's decision to go public with its views - in a blog penned this week by IMF European director Poul Thomsen and chief economist Maruice Obstfeld - Tsipras will propose that the organisation abstains altogether from the bailout programme currently keeping the country afloat. "The Fund has never officially joined this programme and we don't really need it," said one. "At most it could be reduced to a technical, consultative role."
The leftist leader, who on Tuesday blasted the body for being staffed by "irrational technocrats," is said to be incensed that it is now asking for more pension and tax cuts once the programme expires in 2018. Far too often, he said, the IMF had got it wrong with assessments that either over-estimated or under-estimated the impact of recessionary policies on Greece.
In the blog, Thomsen and Obstfeld sought to clarify what they described as "misinformation" surrounding the Fund's role in Greece insisting that far from advocating more austerity the organisation wanted less. Instead, they said, it was the agreement of Athens to achieve higher fiscal targets that made more austerity inevitable.
Tsipras' new stance has not been met with universal applause. Many see it as counter-productive, arguing that despite popular myth the IMF is by far Greece's best ally supporting it on the need for debt relief and primary surplus requirements to be reduced.
2.48pm GMT
Ahead of the Federal Reserve's interest rate decision, US markets have edged lower.
The Dow Jones Industrial Average - which has been toying with the 20,000 barrier for the first time - is down 11 points at 19,900 while the S&P 500 and Nasdaq Composite are also marginally lower.
2.42pm GMT
Oil prices have slipped lower after their surge since the weekend's agreement between Opec and non-Opec producers to cut output.
The fall follows data from the American Petroleum Institute on Tuesday showing a 4.7m weekly rise in US crude inventories compared to expectations of a 1.6m decline. Official figures from the US Energy Information Administration are due later.
2.18pm GMT
Something for the Federal Reserve to think about as they sign off on their latest interest rate decision, with the first rise for a year widely expected.
Retails sales growth cooled off in November after two months of strong gains. They edged up just 0.1% as consumers cut back on car purchases, while October's figure was revised down from the initial 0.8% gain to 0.6%. Economists had been expecting a rise of 0.3%.
Retailers will be more than a little disappointed with November's drop in retail sales, as well as October's revised figure, which overall leaves question marks hanging over the sector going in to the festive shopping season.
However, observers will point to the contentious presidential election as a prime reason for shoppers keeping their wallets closed amid the swirling uncertainty.
..What really grabs the attention is the 1.3% month on month rise in trade services. This is mainly due to wider margins in the wholesale and retail sector. And as such, could well be echoed in the November CPI release on December 15.
With the consensus expectation for only a 0.2% month on month increase in November's headline CPI, we now think that the risk of a higher (say 0.4% month on month) figure is looking more likely.
1.28pm GMT
Labour market expert Paul Bivand has tweeted some useful charts on today's UK unemployment report, which show how the labour market appears to be cooling:
Employment clearly turned down over last couple of months. pic.twitter.com/9kGgTA0Tjy
The employment rate started falling earlier - as employment did not rise as fast as population. pic.twitter.com/rRvkGwyiBY
Young people not in full-time education nor in employment now rising pic.twitter.com/7x4SrY2nFM
Employment rate down most regions, but up in Yorkshire and the West Midlands. Biggest fall in Scotland and the East of England. pic.twitter.com/U4wSYP2E91
Economic inactivity UP most regions, except Yorkshire and West Midlands pic.twitter.com/PgfvbZzZ7s
1.14pm GMT
With the UK employment figures out of the way, investors are waiting patiently for the Federal Reserve's interest rates decision in six hours time.
European stock markets are basically flat (the FTSE 100 has lost 7 points, or 0.1%), and Wall Street is expected to open quietly in 75 minutes time.
US Opening Calls:#DOW 19905 -0.01%#SPX 2272 +0.01%#NASDAQ 4941 +0.12%#IGOpeningCall
12.49pm GMT
Back in the City, shares in British's second largest pub chain have soared by a third as a takeover battle breaks out.
Punch Tavern is being pursued by Heineken, the Dutch brewer which produces Strongbow and Foster's, and also by Alan McIntosh, one of Punch's cofounders.
EXCLUSIVE: Heineken in secret takeover battle for Punch Taverns, group which owns 3300 pubs. Bidding against Punch co-founder Alan McIntosh.
There can be no certainty that any firm offer will be made by either Patron or Emerald. A further announcement will be made in due course.
12.03pm GMT
The Resolution Foundation have helpfully fired some charts over., showing how real wage growth is still below its pre-crisis levels (pay rises minus inflation).
11.15am GMT
Today's report shows that there are now 4.75 million self-employed people in the UK, up 129,000 compared to last year.
Mike Cherry, National Chairman at the Federation of Small Businesses, is urging the government to provide more help for these workers - who aren't entitled to the full range of benefits which employees receive.
"The huge rise in self-employment since the recession must be met with action. There is much to do to improve our social security and financial systems in particular.
"Social security and our tax system have not kept up with the changing nature of 21st century work. It is urgent that Government gets to grips with the new reality of more people striking out on their own and working for themselves. In maternity, low pay, pensions and the housing market, the self-employed lose out from systems designed for a different age.
11.09am GMT
Suren Thiru, head of economics at the British Chambers of Commerce (BCC), predicts that the unemployment rate will rise from its 11-year lows next year:
"The labour market remains a source of strength for the UK economy. The number of people in work remains close to historically high levels, with unemployment levels continuing to fall.
"However, there are signs that the UK labour market may be beginning to cool, with a small fall in employment and the continued rise in the claimant count measure.
10.56am GMT
Dr John Philpott, Director of The Jobs Economist, is also concerned that the labour market is cooling down:
"The UK labour market finally appears to be suffering a bout of post-Brexit vote blues which is now hitting recruitment. The number of people employed in the private sector has fallen by 17,000 and vacancies have levelled off, though an offsetting rise of 12,000 in public sector employment (mostly in education and the NHS) has limited the fall in both the overall job total and the employment rate.
Despite this headline unemployment is down 16,000 on the quarter but only because the jobs slowdown is disguised by a sharp rise of 76,000 in the number of people out of work who are economically inactive.
10.53am GMT
John Hawksworth, chief economist at PwC, says today's Britain's labour market is cooling after a solid run:
"Today's data provides the clearest evidence yet that the jobs market has started to cool off since the Brexit vote. Total employment in the three months to October was broadly flat compared to the previous three months, having been rising strongly in the year before the EU referendum.
"The official unemployment rate held steady at 4.8%, but this disguised a marked rise in economic inactivity of over 100,000 in the latest three months. The more timely but less comprehensive claimant count measure of unemployment edged up again in November for the fourth month in a row.
Regular pay growth edged up to 2.6%, and is now close to 3% on average in the private sector. This is good news for workers facing the prospect of rising consumer price inflation over the next year, but could dampen future jobs growth if it continues."
10.38am GMT
Professor Geraint Johnes, director of research at Lancaster University's Work Foundation, has dug into today's data and found that more self-employed workers are now only working part time hours.
That may be a sign that some firms are suffering a drop in demand.
"The number of full-time self-employed workers fell by some 55000 while those of part-time self-employed workers rose by 53000.
The nature of many jobs undertaken by self-employed workers is precarious, and it is not at this stage clear to what extent the shift towards part-time work is voluntary. To the extent that it is not, there may be clouds on the horizon."
4.79 million self-employed people for Jul-Sep 2016, 15.0% of all people in employmenthttps://t.co/zIPUczQATR
10.21am GMT
The rise in wage growth, from 2.4% to 2.6%, will unfortunately be eroded by inflation - which jumped from 0.9% to 1.2% in November.
TUC General Secretary Frances O'Grady urges the government to help workers, particularly in the public sector.
"Wages are still struggling to get off the ground with increases in pay offset by rising inflation. After the longest wage squeeze since Victorian times, this isn't the pay boost working people need to get their living standards back on track.
"The government needs to act fast to avoid another living standards crisis. That means a clear plan for Brexit that will protect jobs, pay and rights. And we need a quick end to the unfair public sector pay cap, which will see public sector workers face year-on-year cuts to real pay."
UK average earnings growth (ex-bonuses) over the past 15 years.
Now 2.6%, nearing the post-crisis high 2.8%. Will it break higher? pic.twitter.com/yehEyEQTVX
10.13am GMT
Today's labour market report also suggests that Britain became a little more productive in the last quarter.
We worked a combined total of 1.01 billion hours in the August to October quarter, which is five million hours fewer than in May to July.
Good news. In the quarter to October total hours worked down 0.5%, NIESR estimate GDP grew by 0.4% in same period = productivity pick up.
UK productivity seems to have risen as GDP rises but hours worked fall "This was 5.0 million fewer than for May to July 2016 "
10.00am GMT
Economist Rupert Seggins flags up that the claimant count has been rising for several months - a sign that the UK labour market may be weakening.
The headline unemployment rate was down to 4.8%, but the nyumbers claiming JSA and Universal Credit have been creeping up since July. pic.twitter.com/tJ14Dm3QaZ
The unemployment rate where you live. Who'd have thought London would have one of the three highest regional rates? pic.twitter.com/6rfgTMXzSp
9.57am GMT
Here's the key points from today's labour market report:
For August to October 2016, there were 31.76 million people in work in Britain -- 6,000 fewer than in May to July 2016 but 342,000 more than for a year earlier.
Unemployment rate stays at 11 year low of 4.8% in 3 months to October, but employment rate edges down v.slightly to 74.4% from 74.5%
9.53am GMT
Breaking: Unemployment rate remains at lowest level in over a decade pic.twitter.com/ZnYDi3HPeB
9.44am GMT
There's good news for workers:
Average weekly earnings excluding bonuses rose by 2.6% year-on-year in the three months to October, up from 2.4% last month.
9.34am GMT
Here's Bloomberg's snap take of the unemployment report:
U.K. employment fell for the first time in more than a year in the three months through October as the labor market showed some signs of weakness.
The number of people in work fell by 6,000 to 31.76 million people, the Office for National Statistics said on Wednesday. While the decline was small, and the jobless rate was unchanged at 4.8 percent, the statistics office said the labor market "appears to have flattened off in recent months."
BREAKING: Britain's employment falls for first time in more than a year https://t.co/PldQi1XrVJ pic.twitter.com/Z3vip1SBJq
9.32am GMT
Breaking: Britain's jobless rate remains at an 11-year low of 4.8% for the three months to October.
That matches last month's figures.
9.28am GMT
UK jobs in a few - we think improvement has stagnated and wages will be subject to seasonal weakness
9.05am GMT
Italian banking shares have hit their highest level since June, having gained 1.3% this morning.
Traders haven't given up hope that the sector's weaker banks can be recapitalised, especially after Unicredit's a13bn cash call received a warm welcome yesterday.
Italy's main banking index has climbed to its highest level since June - recovering 25% since the referendum https://t.co/5XWxvULsiC pic.twitter.com/Ql7tEXOMK0
ftse italy banks up 25 pct since renxit
8.59am GMT
Kit Juckes of Societe Generale predicts that the Federal Reserve will play a very straight bat today, when it (probably) raises US interest rates for the first time in 2016.
A year ago, markets expected the Fed Funds rate to be in a 0.75-1% range by now. By this evening, they are likely to have crawled to 0.50-0.75%. If for no other reason, that should caution anyone expecting much in the way of a hawkish message from the FOMC - this is a Fed leadership group whose main feature is its dovishness.
Given that the single biggest source of economic uncertainty hanging over the US economy right now is the outlook for fiscal policy -what will President Trump do? - the temptation to be very, very bland in the statement that accompanies a thoroughly-discounted rate hike at 7pm GMT, is likely to be irresistible.
8.53am GMT
FTSE100 opens lower Wednesday, now trading down at 6,947.04 (-0.31%) with investors cautious ahead of Fed interest rate decision later today
8.33am GMT
There's no drama in the foreign exchange markets either, where the pound is sticking firmly to $1.267 against the US dollar, up just 0.1%
Traders may be reluctant to take big positions ahead of today's Federal Reserve meeting, which could spark volatility depending how hawkish or dovish Janet Yellen is.
It was the night before Fedmas and all through the house, no one was stirring, not even the pound.
8.15am GMT
Europe's stock markets have opened cautiously, as investors sit tight ahead of today's UK unemployment report, and the Fed meeting tonight.
London's FTSE 100 has dipped by 16 points, or 0.25%, and there are similar declines in France and Germany.
7.55am GMT
Michael Hewson of CMC Markets agrees that today's earnings figures are particularly important, following the rise in inflation from 0.9% to 1.2% yesterday.
Inflation certainly appears to be on the way back in the UK in numbers released yesterday, which showed that CPI hit its highest levels in two years driven primarily by clothing and fuel prices, while a rise in import prices to their highest levels since 2011 was an unwelcome portend of what could be around the corner in 2017.
Unemployment is expected to remain at 4.8%, while average earnings are expected to remain at 2.3%.
Today's econ news - ONS employment data: unemployment rate and average earnings are forecast to remain steady at 4.8% and 2.3% respectively pic.twitter.com/VKhFhK4UXO
7.40am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Employment growth momentum is fading but it is still early days as far as capturing the referendum effect is concerned.
The most important question: Will Trump tweet about this week's Fed decision. https://t.co/ty6k66ttFP via @chrisjcondon
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