Pound volatile after mixed polls, while FTSE 100 slips from record high - as it happened
Latest GDP figures show that Britain lagged behind other advanced economies in the first quarter of this year
- Latest: UK slides to bottom of G7 growth table
- Canada becomes latest advanced economy to beat UK in Q1
In the markets....
- FTSE 100 hits record high after Panelbase poll
- Pound hits six-week low in volatile trading
- YouGov: Theresa May could fall short of majority...
- ...Analysts aren't convinced
- Housing market is slowing as mortgage approvals fall
6.06pm BST
The recovery in the pound has left the FTSE 100 in the red after the index earlier hit a new all time peak, and it was a fairly mixed picture elsewhere. With Wall Street falling back, European markets had an uncertain feel about them, with concerns about the forthcoming elections, not just in the UK but in Germany and perhaps Italy too. But despite this, they did manage to record their fourth straight month of gains, with the pan-European Stoxx 600 index up 0.9% in May. The final scores showed:
5.55pm BST
Here's Reuters on the correction to the earlier Chicago purchasing managers' report:
The initially reported headline figure for the Chicago PMI was apparently incorrect and Market News International has "revised" it to 59.4 from 55.2 first reported. The update changed the entire complexion of the original report and renders earlier market analysis largely inoperative. It took the headline index from an initial report of a 4-month low to being a 30-month high. MNI removed the original May release from the ISM-Chicago website but did not explain its error.
5.11pm BST
More on the UK election opinion polls:
YouGov poll that Tories won't win majority is outlier. Other signs point to a ~100 maj'ty, +tve for , Brexit deal: https://t.co/VTmOYuhInj pic.twitter.com/fyUTOQIQla
4.44pm BST
A recovery in the pound on the latest opinion poll news has taken the shine off the FTSE 100.
Sterling is currently up 0.34% against the dollar at $1.2903, up from its low of $1.2767. The late positive run for the currency has seen the FTSE 100, which hit an intra-day high of 7586, slip into the red at the close, down 0.09% at 7519.95.
Sterling is flying at month end. Some month-end positioning and new polls showing a renewed Tory lead helped lift the pound over the $1.29 handle, amid signs that trading in sterling will be fairly choppy in the coming days.
It looks like the foreign exchange market has decided to shrug off that YouGov survey which indicated a hung parliament is the most likely outcome from the June 8th poll.
4.33pm BST
Meanwhile there are reports that the Chicago data from earlier has been corrected.
The purchasing managers' index was initially said to have fallen from 58.3 to 55.2, but now it has apparently been revised to show a rise to 59.4.
Hearing That Chicago PMI Has Been Corrected To 59.4 From Original 55.2 - MNI
3.46pm BST
Connor Campbell, marketing analyst at Spreadex, said:
You can tell the election is just over a week away, as the market has been abuzz with volatility this Wednesday afternoon.
In the UK polls have continued to be the main driver of trading, with the UK markets remarkably sensitive to each individual survey. The latest report came from PanelBase, which gave Theresa May's Tories a 15-point lead over Labour, news that not only helped the pound erase its losses against the dollar, but sent the FTSE to a fresh all-time high. The fact that the pair moved in the same direction is notable, suggesting that the FTSE wants a Tory win just as badly as sterling, even if the weakened pound has been the main driver behind the UK index travelling to its current record levels.
3.39pm BST
Sterling has now recovered all its lost ground against the dollar, as a new poll from Kantar shows the Conservatives increasing their lead over Labour from 8 points to 10 points.
Sterling is now 0.2% better at $1.2882 having earlier fallen as low as $1.2767. Against the euro the pound has recovered to a1.1476, down 0.16% after being as low as a1.1432.
3.25pm BST
Back with the UK, and ratings agency Moody's has raised its forecast for economic growth this year but warns Brexit related uncertainty will have an effect eventually. It said:
The British economy grew at a quarterly annualised rate of only 0.8% in the first quarter of 2017. Consumer spending, which has been a strong driver of growth since mid-2016, is slowing as a rise in inflation squeezes real wages.
We expect that the UK economy will grow around 1.5% this year, slowing further to 1% in 2018 owing to a slowdown in investment amid Brexit-related uncertainty.
3.15pm BST
Another set of US data has missed expectations.
Sales of previously owned US homes fell by 1.3% in April, compared to forecasts of a 0.5% rise. This is the second straightly monthly decline, according to the National Association of Realtors.
Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market. Realtors are indicating that foot traffic is higher than a year ago, but it's obviously not translating to more sales.
Prospective buyers are feeling the double whammy this spring of inventory that's down 9.0 percent from a year ago and price appreciation that's much faster than any rise they've likely seen in their income.
3.02pm BST
Despite Canada's impressive economic growth in the first quarter, the International Monetary Fund points to possible problems ahead:
Canadian economic outlook subject to significant risks including housing market and US related policy uncertainty. https://t.co/0r2AWAvkCs
2.56pm BST
In the wake of the poor Chicago data, US markets have gone into reverse.
The Dow Jones Industrial Average is currently down 34 points or 0.17%, while the Nasdaq composite - have earlier hit a new high - has now slipped around 0.1%. The S&P 500 is also down a similar amount.
2.51pm BST
Over in the US, and a disappointing outcome from the latest Chicago purchasing managers' index:
US Chicago PMI May: 55.2 (est 57.0; prev 58.3)
2.44pm BST
Here's a chart showing how the UK was the joint-slowest G7 economy in the first three months of this year:
2.42pm BST
Over in New York, the Nasdaq has just hit another record high at the start of trading.
BREAKING: Nasdaq Composite opens at fresh record high https://t.co/FZP0ncb4O0 pic.twitter.com/p61fI9fGBp
2.31pm BST
City traders are catching their breath after a busy morning of sterling volatility, and another record high on the FTSE 100.
Fawad Razaqzada, market analyst at Forex.com, sums up the morning:
What a comedy show this is turning out to be. Last night saw sterling tumble after research by the Times newspaper and YouGov suggested that there could be a hung parliament. Today, it retraced all of those losses after a Panelbase Poll showed that the Conservatives' lead was not only intact but that it had risen to 48% from 47% previously, while the Labour party remained unchanged at 33%.
Sterling is currently reacting negatively to any narrowing in the polls between the two major parties mainly because of the threat of Labour's promise of corporation tax increases, which is deemed by the market as growth-chocking and not so business-friendly.
If new polls show support for Theresa May is falling then the pound could fall once again, and vice versa. It is as simple as that. Thus, UK data should continue to play second fiddle to politics until the elections are over.
#FTSE100 on track for its best month this year. It's up 4.96% in May, marking its best month since December 2016 when it rose 5.29% #GE2017 pic.twitter.com/mregRs8svO
1.41pm BST
Newsflash: Canada's economy grew by an impressive 0.9% in the first three months of this year, outpacing other advanced economies.
#Canada is growing like an emerging market - +3.7% in Q1
1.14pm BST
Newsflash: India's economy grew slower than expected in the first three months of this year.
Indian GDP expanded by 6.1% over the year, weaker than expected. Economists had forecast annual growth of between 6.5% and 7.8%.
LATEST: India's economy expanded by 6.1% in first quarter, less than estimated https://t.co/hmqvOTvyoz pic.twitter.com/sQa4X8ZStD
12.57pm BST
The FTSE 100 is continuing to hit new record highs. It's now reached 7576 points for the first time ever, up 49 points (or 0.66%).
Banks are leading the way, with Standard Chartered up 3.3% and Barclays gaining 2.4%.
12.11pm BST
Britain's blue-chip index has just hit a new alltime high, as general election action continue to grip the City.
The FTSE 100 index has hit 7563, up 37 points today, and breaking through last Friday's peak of 7554 points.
Another #FTSE100 record high -- despite sterling recouping most of the day's losses. Now, about those 'shock polls' .... ^KO
11.43am BST
The pound's sensitivity to these opinion polls is a little concerning.
This chart shows how sterling hit a six-week low after YouGov predicted a hung parliament, but bounced back as Panelbase reported a solid Conservative lead of 15 points.
You don't have an emerging market currency until it's reacting to politics. Sterling starting to move on opinion polls/projections again. pic.twitter.com/2Szb0v8SnN
11.35am BST
Newsflash: The pound is pushing higher after a new opinion poll gave Theresa May a 15 percentage point lead ahead of next week's election.
Panelbase report that the Conservative Party have 48% support, compared to Labour's 33%.
Panelbase Poll: Tories 48% (Prev 47%), Labour 33% (Prev 33%)
11.28am BST
James Andrews, head of investment management at Redmayne-Bentle, predicts that the pound is entering choppy waters.
He fears that further losses against the euro and the dollar are likely, as the European economy recovers.
We are likely to continue to see volatility in the Pound in the run-up to the election, and indeed for the foreseeable future, as Brexit negotiations step-up post the outcome of the election.
Given the prolonged uncertainty ahead of us, not to mention this short-term election-driven uncertainty, it seems any relief rallies will be just that, and the Pound will find it difficult to sustain any upward momentum. In addition, further rate rises in the US and stronger fundamentals from the European economy will likely see strengthening of the Euro and the Dollar, providing further headwinds for Sterling going forward."
10.35am BST
The pound isn't looking particularly strong and stable. Instead, the worst-performing major currency so far today.
The pound is the worst performing major currency in the world today. https://t.co/fQfh0BEHMm pic.twitter.com/MYCXLDWf9g
10.32am BST
Sterling has now sunk to a six-week low against the US dollar as the selloff picks up pace.
The pound has fallen to $1.278, its lowest level since Theresa May called a general election on April 18th.
"The latest poll suggesting a hung parliament is likely has shaken markets.
Were this to be the outcome of the General Election on 8 June, we can expect a repeat of this behaviour, with significant volatility in sterling. Yet today's poll distracts from the many others showing that a Conservative majority remains the most likely outcome, as is our base case. With no further indications of a hung parliament, the recent fall in sterling may be seen as a buying opportunity for investors.
10.17am BST
Unemployment across the eurozone has hits its lowest level since the financial crisis, in another sign that Europe's recovery is gathering pace.
The eurozone jobless rate dipped to 9.3% in April, reports Eurostat, the lowest in over eight year.
Euro area unemployment at 9.3% in Apr 2017: lowest rate since Mar 2009. EU at 7.8% - lowest since Dec 2008 #Eurostat https://t.co/uFZ2eLe8C2 pic.twitter.com/d0vyjlIRJu
10.08am BST
Newsflash: inflation across the eurozone has fallen to 1.4% this month, down from 1.9% in April.
That's a sharp drop, as prices returned to more normal levels following Easter.
Euro area inflation down to 1.4% in May 2017: flash estimate from #Eurostat https://t.co/yE3pc4hsE9 pic.twitter.com/NAooBIRfoU
Below, but not so close to 2%...
Euro zone inflation slides to 1.4% in May from 1.9% in April, below forecast 1.5%.
9.50am BST
Breaking: Britain's housing market cooled off in April, with mortgage approvals falling to a seven month low.
Just 64,645 mortgages were approved by banks and building societies last month, new figures show. That's the smallest increase since September 2016.
The steam is coming out of the UK housing market. Mortgage approvals fall for the 3rd month in a row in April, to 65k. pic.twitter.com/TeCKfk5VcH
More evidence of a housing market slowdown as mortgage lending hits 12 month low - up 2.7bn - says @bankofengland.
9.36am BST
British households have become more upbeat about their personal finances and the economy despite the political uncertainty and rising prices in the shops, according to a new survey.
UK consumer confidence defied economists' forecasts for a dip and instead edged higher in May as measured in a monthly barometer from market researchers GfK. Its main index rose to -5 from -7 in April.
9.27am BST
Newsflash: Germany's unemployment rate has hit its lowest rate since the country was reunified 27 years ago.
The jobless rate across Europe's largest economy fell to 5.7% in May, new figures from the German Labour Office show, down from 5.8% in April.
#Germany's Wirtschaftswunder continues. German jobless rate drops to 5.7%, lowest since unification. pic.twitter.com/DbEdP3yb63
9.16am BST
The pound's decline has helped to push up the value of multinational firms listed in London.
Consumer goods giant Unilever, international packaging firm Monti and information group RELX (formerly Reed Elsevier) have all gained around 1%.
9.07am BST
Edward Hardy of currency exchange firm World First reckons YouGov's poll should come with a "a major health warning".
Pollsters don't usually project constituencies seat-by-seat and there's a reason why; the margin of error leaves the likelihood of this poll coming true particularly small.
Sterling hung out to dry - World First Morning Update - https://t.co/rbIGhykNUC pic.twitter.com/87tgyv25Lg
YouGov poll sugg CONs could get as many seats as 345, or few as 274. Don't see this caveat anywhere. Oh that's right - everyone covfefeing! pic.twitter.com/nXrbyHV1jO
8.44am BST
Sterling has also lost ground against the euro this morning, losing 0.4% to a1.145.
That means one euro is now worth 87.33p (compared to 76p before last June's EU referendum).
The importance of politics as a market driver currently can't be overstated. Perhaps that shouldn't surprise anyone when the economic backdrop is relatively dull.
This morning, the pound is the main victim again as a YouGov poll points to a possible hung parliament as the Conservatives risk losing seats in next week's election. We're supposed to treat polls with suspicion but needless to say, we remain bullish of EUR/GBP even if I've lost my bet that it would trade above 0.90 by the start of this week
8.38am BST
Kathleen Brooks of City Index is sceptical about YouGov's prediction, arguing that the pollster's methodology is too untested to make such sweeping claims.
She thinks it most likely that the Conservatives will win a small majority, but fears that even this could hit the pound.
We think there is a chance of a deeper sell off back towards $1.20 if it looks like Theresa May won't have a big enough mandate to agree a trade deal with the UK. The prospect of no deal from the Brexit negotiations has spooked investors and may continue to do so after this election. This could weigh on sterling and the broader FTSE 350 index.
We would expect the political uncertainty that could arise from a hung parliament and a potential change in leadership would weigh heavily on the pound and the FTSE 100.
Although we can't discount the times/yougov poll, it is a lone voice calling for hung parliament. Also, it uses untested methodology...
8.33am BST
YouGov's shock forecast that the Conservative Party could lose 20 seats in next week's election is the talk of City this morning.
The suggestion that Britain could be left with a hung parliament next week has cast a cloud of uncertainty over the financial markets, says Neil Wilson of ETX Capital.
A hung parliament is the nightmare scenario for May. It would constitute a massive personal failure and undoubtedly make for great domestic political uncertainty at the worst possible moment for Britain.
If Mrs May fails to get the thumping majority she hopes for, her position will be a lot less secure than before she called the snap election.
8.08am BST
A new forecast that Britain could be left with a hung parliament next week has knocked the pound.
Sterling fell below $1.28 after YouGov analysis , published in The Times, suggested that Theresa May could be left 16 seats short of an overall majority.
In the currency market, it is the British Pound which has attracted the most attention as the latest polls from YouGov shows that the big gamble by Theresa May could cost her majority lead in parliament. This is not something which she has pictured but again, the same story goes for David Cameron when he took the gamble for the Brexit vote. The YouGov poll shows that her party could lose as much as 20 seats and Labour could gain nearly 30 additional seats. So much for all the rhetoric "making her hand strong in the parliament".
This has taken a toll on the British pound, and it has lost ground against a basket of currencies.
Investors are worried about a hung parliament, and if we get more polling data which confirms that the possibility of a hung parliament is more real, we could see the British pound losing ground against the dollar and the Euro. We do think that the sterling-dollar pair could drop all the way to 1.26 mark if we break the support of 1.2752.
Tonight: we reveal YouGov's first seat by seat projection of the campaign - suggests Tories fall 16 seats short of overall majority pic.twitter.com/8ouPRHTZ7m
"The poll allows for big variations, however, and suggests that the Tories could get as many as 345 seats on a good night, 15 more than at present, and as few as 274 seats on a bad night,"
The pound is trading below $1.28 this morning as new poll suggests Theresa May could fall short of a majority. AB9 #GE2017 #GBPUSD
7.53am BST
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