Household spending grows at slowest rate in six years - business live

Official figures show UK household spending grew by 1.7% in 2017, the weakest rate since 2011 as falling real pay took its toll on family finances

• Barclays to pay $2bn fine in US
• US jobless claims fall to 45-year low
• UK growth confirmed at 0.4% in Q4 2017
• Bargain Booze owner to appoint administrators
• UK house prices fall for second month in March
• GKN: bitter takeover battle comes to a head
• Pound on track for best quarter since 2015

3.12pm BST

Before we close up for the day, here is a summary of the main developments:

2.50pm BST

US markets after the opening bell:

2.41pm BST

Barclays has agreed to pay $2bn to settle claims that it fraudulently sold residential mortgage-backed securities in the run-up to the financial crisis.

This settlement reflects the ongoing commitment of the Department of Justice, and this Office, to hold banks and other entities and individuals accountable for their fraudulent conduct.

The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors in RMBS.

Barclays Agrees to Pay $2 Billion in Civil Penalties to Resolve Claims for Fraud in the Sale of Residential Mortgage-Backed Securities https://t.co/nlKJWU8lMQ

2.11pm BST

The number of Americans filing new claims for unemployment benefits fell to the lowest level in 45 years last week.

Initial claims fell 12,000 to 215,000 in the week ending 24 March, the lowest since January 1973, the US Labor Department said.

1.32pm BST

John McDonnell, the shadow chancellor, says he is concerned by this morning's ONS figures, which showed the savings ratio hit a record low of 4.9% in 2017.

He says:

These are deeply worrying figures. The fact that for the first time in 30 years households are now net borrowers, taking on more debt and seeing their incomes squeezed by inflation, while the savings ratio is at its lowest level since records began, should be setting off alarm bells in the Treasury.

The chancellor stubbornly refused to use the spring statement to help working families, but he must now reconsider his policy of inaction as households are clearly reeling from the effects of eight years of Tory economic failure - with real wages still lower than when the Conservatives first came to power in 2010.

1.28pm BST

President Trump has made very clear his feelings about Amazon in his first tweet of the day:

I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!

1.23pm BST

Time for a European market update:

1.15pm BST

US stock index futures are up with tech shares posting slim gains after being hammered earlier in the week.

Shares in the so-called FANG group - Facebook, Amazon, Netflix, and Google (now Alphabet) - were up between 0.6% and 1.6% in pre-market trading.

Global Stocks, US Futures Limp Tentatively Higher Ahead Of Long Weekend https://t.co/J08nryKTBq

12.14pm BST

This morning's GDP report from the ONS showed that household spending grew by 1.7% in 2017 - the weakest since 2011.

It reflects the tough backdrop faced by consumers since the Brexit vote in 2016, which drove a sharp fall in the value of the pound and pushed up the price of goods imported from abroad.

The detail today laid bare the squeeze on the household cash position sitting behind this subdued spending backdrop. Real household disposable income rose by just 0.1% over the quarter, a softening from the already subdued 0.3% increase in Q3.

Wages and salaries were a positive influence to incomes growth but their influence was almost completely offset by the impact of rising inflation. Following a run of soft outturns, real household incomes grew by just 0.3% in 2017 as a whole.

With a sustained rises in real wages on the horizon, the outlook for spending growth remains bright.

This supports our view that the economy will grow by around 2% this year, above the consensus estimate of 1.5%.

Related: UK inflation is falling fast - that's good and bad news

11.38am BST

Shares in Renault rose more than 5% after Bloomberg reported the French car maker is in talks to merge with Japanese car giant Nissan.

Bloomberg says:

Renault SA and Nissan Motor Co. are in talks to merge, seeking to solidify their two-decade-old alliance under a single stock as an unprecedented shift toward electric and shared cars transforms the industry, people with knowledge of the matter said.

A deal would end the current alliance between the companies and marry them as one corporation, said the people, who asked not to be identified as the details aren't public. Renault currently owns 43 percent of Nissan while the Japanese carmaker has a 15 percent stake in its French counterpart. Carlos Ghosn, the chairman of both companies, is driving the negotiations and would run the combined entity, the people said.

BREAKING: Renault and Nissan are in talks to merge and create a new automaker, sources say https://t.co/CjxLolYQy0 pic.twitter.com/WxzL5VLXwM

11.23am BST

How the pound has fared against the dollar since the EU referendum:

11.09am BST

The pound is on course for its best quarterly performance against the dollar since 2015, despite dipping this morning.

10.40am BST

CME agrees 3.9bn deal for Michael Spencer's Nex Group

The world's largest futures exchange, CME Group, has agreed to buy Michael Spencer's Nex Group in a 3.9bn deal that will net the former Tory party treasurer 670m.

10.27am BST

Britain's services sector continued to be the main driver of growth in the fourth quarter of 2017, despite being revised down. It accounts for about three quarters of the UK economy.

9.52am BST

The ONS has revised its estimate for annual growth in 2017 back up to 1.8%.

That's in line with its first estimate, before the ONS revised it down to 1.7% in its first revision.

Household spending grew by 1.7% between 2016 and 2017, the slowest rate of annual growth since 2011.

9.36am BST

The UK economy grew by 0.4% in the final three months of 2017, the Office for National Statistics confirmed in its latest estimate of GDP. It was unchanged from previous estimates.

Rob Kent-Smith, a statistician at the ONS, gives a handy overview:

Economic growth at the end of last year was unrevised with services and manufacturing continuing to drive growth.

Household borrowing increased throughout 2017, while their saving was the lowest on record. However, the UK's deficit with the rest of the world shrank, as the UK received increased earnings on foreign investments thanks to a growing world economy.

9.31am BST

Brian Murphy, head of lending for the Mortgage Advice Bureau, has commented on the 0.2% fall in UK house prices reported by Nationwide:

Given that some areas of the country, such as Northern Ireland and Wales, are seeing more significant increases in prices, while London is still seeing prices cool, suggests that the [headline figure] masks a broad degree of variance across the regions, which rather underscores the effect that dipping London and South East values are having on the wider average.

That there is still such a marked North-South divide in average house properties values is, of course, no surprise. However, market conditions in London and thew South East market would appear to be somewhat lacklustre when compared to other areas, proving that consumer confidence is still very strong outside the capital and its commuter belt, as underscored by the ongoing paucity of stock in these areas.

9.20am BST

Germany's unemployment rate fell to 5.3% in March from 5.4% in February. That's the lowest rate since German reunification in 1990.

The total number of unemployed people fell more than expected by 19,000 to 2.37 million.

German employment.

No comment needed. pic.twitter.com/zj5iMRjTWW

9.09am BST

Nationwide has published its latest monthly house price index which shows the average price fell 0.2% in March, to 211,625.

It followed a 0.4% fall in March, and took the annual rate of house price growth to 2.1%. The last time the annual rate was weaker was June 2013.

On the surface, the relatively subdued pace of house price growth appears at odds with recent healthy rates of employment growth, a modest pick-up in wage growth and historically low borrowing costs. However, consumer confidence has remained subdued, due to the ongoing squeeze on household finances as wage growth continues to lag behind increases in the cost of living.

Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year.

8.45am BST

Here is our full story on Conviviality, which this morning said it would file for administration within a fortnight:

Related: Bargain Booze owner Conviviality to file for administration

8.42am BST

The number of cars rolling off UK production lines fell again in February after a 17% drop in demand from the home market.

A total of 145,475 cars were made in British factories last month, down 4.4% on a year earlier.

Another month of double digit decline in production for the UK is of considerable concern, but we hope that the degree of certainty provided by last week's Brexit transition agreement will help stimulate business and consumer confidence over the coming months.

These figures also highlight the scale of our sector's dependency on exports, so a final deal that keeps our frictionless trade links with our biggest market, the EU, after December 2020 is now a pressing priority.

Related: Number of cars built in UK falls for seventh month in a row

8.23am BST

Conviviality, the firm behind Bargain Booze and Wine Rack has announced this morning that it will appoint administrators within a fortnight, putting 2,600 jobs at risk.

Following discussions with its lending banks, the board has resolved to file notice of intention to appoint administrators to the Company. Unless circumstances change, and in accordance with statutory requirements, the board intend to appoint administrators within 10 business days. The secured creditors can, however, appoint administrators without the requirement for notice.

The directors intend to allow the business to continue to trade and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.

Related: Bargain Booze owner Conviviality on brink of collapse

8.03am BST

And we're off. Here are the opening scores across Europe:

7.59am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The one-year countdown to Brexit has begun. Concerns that the UK economy would suffer an immediate slump following the vote to leave the EU proved unfounded, and GDP has continued to grow, albeit at a modest pace.