CBI signals strong end to the year for UK manufacturers - business live
The CBI's December manufacturing survey was stronger than expected, signalling strength in the economy as 2016 draws to a close
- Drugs company Actavis scrutinised for price hikes
- Ifo raises forecasts for German growth
- FTSE climbs back above 7,000
- Eurozone inflation confirmed at 0.6% in November
- Insee: French business confidence rises
6.13pm GMT
American drillers added oil rigs for the seventh week in a row last week.
The Baker Hughes rig survey showed 12 oil rigs and one gas were added, as the crude price recovery encouraged further drilling activity. Oil rigs have been added in 26 of the past 29 weeks.
US Oil Rig Count Surges As Crude Production Reaches 7-Month Highs https://t.co/JS8KQkB8Ib
4.58pm GMT
Despite US markets coming off their best levels - perhaps following a report China seized an underwater US drone in the South China Sea - European shares have ended the week on a fairly positive note. The final scores showed:
4.44pm GMT
More on S&P maintaining its Triple A rating on Germany. The agency said:
We think Germany's highly diversified and competitive economy will continue to sustain its current growth momentum, backed by strong domestic demand and resilient exports against an increasingly challenging international backdrop.
Germany's surpluses on its external and fiscal balance sheet will enable the country to weather external shocks, while ultralow interest rates and strong tax revenue growth continue to benefit its public-sector balance sheet.
4.37pm GMT
S&P affirms Germany AAA, Outlook Stable
4.06pm GMT
Markets remain in positive territory, although they are off their best levels. But the recent rally could continue next week, analysts believe. Chris Beauchamp, chief market analyst at IG, said:
The week ends with gains across the board, although the Dow Jones remains tantalisingly short of the 20,000 target. Still, a good performance from the Russell 2000 this afternoon bodes well for the week ahead. Santa definitely arrived early this year, but perhaps we'll get another rally next week. The FTSE seems happy enough to move above 7000, and it is entirely plausible that the index will touch new all-time highs before everyone sets off for Christmas. It will just require a little sprinkling of festive spirit, and hopefully a good performance from miners, which have been a little under pressure since the Fed announced its plan to raise rates three times next year.
The coming week is not exactly busy, as might be expected, but one area of interest will be the Bank of Japan. The yen has taken a hammering since the election, which has done wonders for the Japanese stock market, but we should not rule out a statement that gives the currency a breathing space. Everyone seems to be long the US dollar, so it wouldn't take much of a change to spark some interesting moves in the week ahead.
3.36pm GMT
Oil is moving higher on hopes that producers will stick to their deal to cut output.
Ahead of the latest Baker Hughes survey of US rigs, Brent crude has climbed 1.7% to $54.94 a barrel and West Texas Intermediate is up 1.57% to $51.70 as Russia said all of its oil companies had agreed to reduce output.
3.05pm GMT
Back with Greece, and ahead of the Merkel-Tsipras meeting, the German finance ministry has said an assessment report on Tsipras' surprise relief package is not going to make for rosy reading, reports Helena Smith:
Athens' lender institutions have assembled a report into whether the Greek prime minister's unilateral measures violate his country's bailout obligations and while preliminary "it is quite critical," a German finance ministry announced today.
The report, requested by Berlin, will be evaluated in full next week. Particular focus will be paid to Tsipras' surprise bonanza for low-income pensioners in the form of a pre-Christmas bonus, in effect a 13th payment.
Germany's hardline stance - at least from it's uncompromising finance minister Wolfgang Schiuble - has triggered mounting speculation that the politician is now bent on ousting the leftist leader and replacing him with the head of the main opposition centre right New Democracy party, Kyriakos Mitsotakis.
"It is obvious that [he] wants to overturn the government and replace it with one that has New Democracy at its core," said Stelios Kouloglou, a Euro MP representing Greece's governing Syriza party. "After [French president] Hollande " and [Italian PM] Renzi he wants to be done with whatever trace of the left has remained in Europe."
2.47pm GMT
US markets are heading higher as the expectation of stimulus measures from the new President continues to provide support.
The three main indices are on track for weekly rises and are all near record highs, even as the Federal Reserve raised interest rates and hinted at three more to come in 2017. The Dow Jones Industrial Average, currently up 42 points at 19,894, is close to breaching the 20,000 barrier for the first time. Meanwhile the S&P 500 has opened up 0.2% while the Nasdaq Composite is 0.26% higher. Michael Hewson, chief market analyst at CMC Markets UK, said:
The big question on most people's lips at the moment is whether the Dow can manage to nibble away at the 20,000 level that it has been flirting with this week. Thus far it has fallen short and the likelihood is that the opportunity to do it this week has passed.
Even if we fall short we've still seen a decent week for US equities, trading as they continue to do at record levels. The big question is how a strong US dollar and a strong US equity market can co-exist at a time when all we have had at the moment is promises of fiscal action, and higher rates.
2.33pm GMT
The typical UK household spends more than 2,000 a month, but in December - in the run-up to Christmas - it spends an extra 500, according to the Bank of England.
And the biggest increase is not, as you might expect, on alcohol but on books, the Bank says.
How much more do we spend at #Christmas? https://t.co/M57brEOCzf #BoEknowledgebank pic.twitter.com/yLlYHMQWJl
2.03pm GMT
US housing starts fell by more than expected in November, falling from a nine year high.
They dropped 18.7% to a seasonally adjusted annual rate of 1.09m units, below expectations of a figure of 1.23m. October's number was revised up from 1.32m to 1.34m, the highest since July 2007.
1.50pm GMT
More on Greece, and some comments from Greek prime minister Alexis Tsipras and German chancellor Angela Merkel ahead of their talks.
Tsipras has said he would tell the chancellor about the positive momentum in the Greek economy and the "spectacular overachievement of revenue targets."
Greek PM Tsipras: Growth in Greece must heal wounds from previous austerity, we can't allow Greece to go back to uncertainty -Rtrs
Merkel expects no decisions on Greek bailout at talks with Tsipras https://t.co/ReeNpl2dnv
Der Spiegel reporting that #IMF wll delay #Greece bailout decision til spring, allowing time for Trump to get lay of the land. ~@AlexRPigman
Heavy bombshell from #IMF, if @DerSpiegel report true. Will create major repercussions both on economic and political level for #Greece.
1.00pm GMT
European markets are at 11-month highs, partly on the back of a weaker euro and expectations for stronger growth in the US next year.
Reuters quotes Markus Huber, trader at City of London Markets:
Stocks are continuing to get a boost from a weaker euro and the notion that the United States, the world's largest economy, will experience an uptick in growth once President-elect Donald Trump has started implementing his new policies.
12.31pm GMT
Europe's main markets are up across the board:
12.05pm GMT
Greece's central bank has appealed for an end to the standoff between the government and the country's creditors.
This emerging positive momentum in the economy needs to be supported and consolidated through adherence to the programme targets and an accelerated implementation of the reforms and privatisations agreed on.
Specifically, the Bank of Greece expects GDP to grow by a marginal 0.1% in 2016, before picking up to 2.5 % in 2017 and further to 3% in 2018 and 2019, supported by investment, consumption and exports.
There is not much time left, in the light of upcoming national elections in a number of euro area countries.
Related: Greece under fire over Christmas bonus for low-income pensioners
11.35am GMT
Paul Hollingsworth, UK economist at Capital Economics, says the CBI surveys suggests the weaker official manufacturing data for October will prove to be a blip.
[It] suggests that the 1% monthly fall in manufacturing output in October, as revealed by the ONS figures earlier this month, was just a temporary blip. Accordingly, we continue to think that GDP growth will become better balanced over the coming quarters.
Despite the decent December CBI industrial trends survey, there are significant potential problems for the manufacturing sector that look likely to build up in 2017.
In particular, business confidence is likely to be hampered by mounting uncertainty over the Brexit process, constraining investment plans and limiting demand for capital goods.
11.12am GMT
While output and orders were up, the CBI survey also suggested the sharp fall in the drop of the pound since the Brexit vote is starting to push up manufacturers' costs.
A weaker pound makes imports from abroad more expensive, and the CBI said factory gate inflation is heading higher as manufacturers pass on to customers some of the price increases they are facing.
It's good to see our manufacturers ending the year on a high note with growth in production the strongest since summer 2014 and total orders still robust.
But the weakness of sterling is pushing up the cost of imports, and our survey shows strong signs of this feeding through to higher factory gate prices.
11.06am GMT
The CBI's industrial trends survey paints a better than expected picture of the UK manufacturing sector in December.
The orders balance was 0, as 21% of businesses reported orders were above normal and 21% said they were below. That was better than the -5% predicted by economists, and the highest level in 20 months.
10.47am GMT
Teva Group, parent company of Actavis, has responded to criticism from the competition watchdog over steep price hikes.
The Competition and Markets Authority says the UK-based Actavis company increased the price of life-saving hydrocortisone tablets by over 12,000% (full story here).
Generic medicines continue to be an affordable alternative to branded therapies. Teva is proud of our track record in bringing cost savings to the NHS as the UK's largest generic medicines manufacturer.
Competition from generic medicines saves the NHS in England and Wales 13.5bn per year overall, and Teva medicines account for approximately 3.2bn of this saving. Although the pricing of the acquired Actavis product (Hydrocortisone) under investigation was never under Teva's effective control, Teva believes that intervention by the CMA in prices for generic medicines raises serious policy concerns regarding the roles of both the CMA and the Department of Health.
10.30am GMT
The annual rate of inflation climbed to a 31-month high of 0.6% in November from 0.5% in October, the Eurostat statistics office has confirmed.
The biggest drivers of the rise came from restaurants and cafes, rents and tobacco, while the price of gas, heating oil and package holidays fell and held the inflation rate back.
10.00am GMT
Olivier Vigna, economist at HSBC, said the French Insee survey was the latest indication that growth in the fourth quarter will pick-up to 0.4% from 0.2% in the third.
Recent surveys on France largely confirm the rebound in the economic activity we expect for Q4 and other forward-looking indicators also point to a higher momentum.
Of course, it would be naive to read too much into the positive signals coming from surveys as they are not always reflected in hard data.
9.48am GMT
Over in France, firms were feeling more confident than expected in December according to the National Institute of Statistics and Economic Studies (Insee).
The headline index rose to 105 from 102. It was the highest level since the summer of 2011. Confidence grew among manufacturing, services and retail firms, but dipped in construction.
After being almost stable since August 2015, equal or slightly above its long term average (100), the climate has improved markedly in December 2016.
9.14am GMT
Germany's economy will be stronger than expected in the fourth quarter according to the Munich-based Ifo Institute.
All signs point to a fourth quarter that is stronger than had been expected until now. We'll take this impetus into the new year.
The change of growth pace from 2016 to 2017 is only due to a lower number of workdays.
8.40am GMT
The UK's Actavis is the latest pharmaceutical company to come under criticism from the competition regulator over sharply hiking the price of tablets.
Related: Watchdog accuses Actavis of hiking price of lifesaving drug by 12,000%
8.20am GMT
The FTSE 100 is up five points in early trading.
So it's a modest gain but takes the UK's leading index of shares back above the 7,000 mark at 7,002.
8.09am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Close attention will be paid to the CBI's December industrial trends survey at 11am today as it will provide a timely health check on the UK economy as 2016 draws to a close.
Today's CBI manufacturing survey is worth watching in the light of the very weak October manufacturing output data which marked a poor start to the monthly indicators that will add up to Q4 GDP.
The CBI survey has been less volatile than the manufacturing PMI recently and the consensus for the orders balance (-5) would be consistent with manufacturing out trending no better than flat.