UK interest rates should be raised without delay, says Bank's McCafferty - as it happened

Chinese president promises to lower import tariffs, easing fears of trade war

2.45pm BST

Stock markets are moving higher after a speech by China's president Xi at the Boao Forum defused some of the fears of a trade war between Beijing and the US. Xi said China would take measures to widen market access for foreign investors and would lower import tariffs on products including cars.

However China is reported to have filed a complaint with the World Trade Organisation over the proposed US tariffs on steel and aluminium.

2.34pm BST

With trade war fears easing after the overnight speech from Chinese president Xi, US markets have opened sharply higher.

The Dow Jones Industrial Average is currently 390 points or 1.63% higher, while the S&P 500 is up 1.36% and the Nasdaq Composite has climbed 1.65%.

The expectation was [the Xi speech] could have gone one of two ways: he could have been aggressive about US tariffs or been conciliatory, and it feels like he's more conciliatory.

2.27pm BST

Back with the Boao Forum in China, and the managing director of the International Monetary Fund has also had talks with president Xi:

I was pleased to meet President Xi at #Boao2018. The IMF will continue working with China to help strengthening global cooperation. pic.twitter.com/MlqoWwVu8b

1.44pm BST

Stronger than forecast US producer price figures for March give more ammunition for the Federal Reserve to raise interest rates again later this year.

The Fed has indicated it could increased borrowing costs another two times in 2018 but some expect another rise on top of that if the economic data merits it.

A major factor in the March advance in prices for final demand services was the index for outpatient care (partial), which climbed 0.4 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; cable and satellite subscriber services; airline passenger services; food and alcohol wholesaling; and hospital inpatient care also moved higher. In contrast, margins for automotive fuels and lubricants retailing fell 10.4 percent. The indexes for apparel, footwear, and accessories retailing and wireless telecommunications services also decreased.

12.35pm BST

As a sign things are a little calmer on the stock markets at the moment, the VIX volatility index - which had been rising in recent days - is currently down 5% at 20.61.

That is not to say there are not a number of uncertainties for investors, from the US/China trade dispute, the situation in Syria, Russian sanctions and the latest on the Mueller investigation in the US.

11.52am BST

European stock markets are holding on to their gains, and Wall Street is still expected to open sharplyhigher. Connor Campbell, financial analyst at Spreadex, said:

The Dow Jones is all set to leap 320 points after the bell, a chunky jump that would take the beleaguered index to 24300, pushing it towards the top end of its recent trading bracket.

However, it is important to note that the US open and close can often operate in completely different universes, especially if Trump gives into his urge to cause a bit of Twitter chaos.

11.40am BST

Brexit is getting real:

Brexit Day has arrived early in stato land. From today, the EU's number crunchers at Eurostat will publish aggregate data for the EU without the UK (as well as the current composition...): https://t.co/nWh8O1jzZ2

11.35am BST

The pound has hit a day's high of $1.4179, up 0.38% on the talk of further interest rate rises. David Cheetham, chief market analyst at XTB, said:

Sterling has moved higher after some hawkish comments from BoE member McCafferty in which he cautioned fellow rate-setters against dallying when it comes to further tightening monetary policy. McCafferty was one of two dissenters who called for higher rates at the last meeting when the bank decided to keep its policy unchanged and his recent comments have pushed the pound/dollar rate to its highest level in more than a fortnight.

With the bank expected to raise rates next month, remarks from the voting members will take on a greater importance in the coming weeks with the previous hike in November - the first such increase in more than a decade - being widely telegraphed in advance.

11.30am BST

Despite the slump in the rouble, Russia's central bank has no plans to introduce any measures to reduce volatility.

The bank's first deputy chairman Sergei Shvetsov said the situation with the rouble was "adequate", according to Reuters.

10.30am BST

And back with the effects of the US sanctions on Russian companies:

Traders' Bloomberg terminals no longer giving stock prices of sanctioned Oleg Deripaska's London-listed En+. Not a great look for the London Stock Exchange, which rolled out red carpet for oleg's en+ float last year.

We warmly congratulate Mr Sokov and his management team on their successful IPO today. Welcoming En+ Group to London Stock Exchange is a significant milestone which underlines the City's position as the leading global listing venue for international companies and investors' appetite for Russian issuers. With 100 Russian and CIS businesses listed and traded on London's markets, with a total capitalisation of over $550 billion, London is a strong partner to Russian companies seeking access to global investor capital, as well as an open and dynamic place to do business.

.@LSEplc delighted to welcome En+ Group to open trading today and celebrate London listing https://t.co/7KQ92HwbvP pic.twitter.com/QYdnmHPVlJ

10.09am BST

The average British household benefited from the Bank of England's emergency interest rate cut in the financial crisis to the tune of almost 9,000 in pay and 90,000 in household wealth, according to its chief economist.

Speaking in Australia, Andy Haldane is defending some of the benefits from low interest rates just before Threadneedle Street looks to increase them to levels unseen since the 2008 crash began.

10.00am BST

And here is the dramatic movement in the rouble - it shows the rise in the number of roubles needed to buy one dollar:

9.46am BST

Meanwhile the Russian rouble continues to come under pressure following the US sanctions against a number of its companies.

The currency is down around 4% against the dollar to 63.28, its second day of heavy losses and its lowest level since December 2016.

9.43am BST

And there is another twist in the trade dispute between the US and China. Associated Press reports:

China is filing a complaint with the World Trade Organisation against U.S. tariffs on steel, aluminium products.

The Geneva-based trade body said on Tuesday that China has requested 60 days of consultations with the United States to resolve the dispute.

9.18am BST

The Bank of England is not the only central bank to be considering reigning in the financial stimulus - low interest rates and quantitative easing - that have supported stock markets since the financial crisis.

Speaking in London, European Central Bank policymaker and Bank of Austria governor Ewald Nowotny said it was now time to "start the gradual normalisation of monetary policy." He said:

We are at an important turning point in monetary policy. We must normalise policy not too soon but not too late.

8.59am BST

Sterling has edged to a two week high after the comments from Bank of England policymaker Ian McCafferty that there should be no delay in raising interest rates.

The pound hit $1.4168 against the dollar in the wake of the remarks, up 0.28%. Against the euro sterling is 0.13% better at a1.1485.

8.42am BST

UK interest rates should be raised again without delay, a leading Bank of England policymaker has said.

After its meeting last month the Bank hinted at an increase in May, and in an interview with Reuters, Ian McCafferty said the prospect of faster pay rises and a strong pick-up in the global economy emphasised the need for dearer borrowing costs before long.

We shouldn't dally when it comes to tightening policy modestly,.

McCafferty said he could not be certain about whether to vote again for a rate rise until May's policy meeting, but there had been no data or Brexit developments so far to make him think he was wrong in March to vote to raise rates to 0.75 percent.

The former chief economic adviser to the Confederation of British Industry has been in the minority of BoE policymakers pushing for a rate hike previously in the past four years.

While the BoE had been wrong in the past about wages finally gaining momentum, labour market surveys so far this year showed that the recent recovery in the headline rate of growth of pay to nearly 3 percent looked more sustainable this time, he said.

Often called one of the BoE's most hawkish policymakers, McCafferty said there had been a case for following up November's rate move with another hike as early as February.

But he held off to avoid surprising households who had been told by the BoE that it plans to raise rates only gradually...

8.28am BST

Mining shares are leading the way in London, while news that US regulators have approved Bayer's takeover of Monsanto and a positive update from LVMH have also helped sentiment.

But ahead of the start of the US reporting season, the main support for the market in early trading is Chinese president Xi's speech at Boao. Kit Juckes at Societe Generale said:

What President Xi didn't say at the Boao Forum matters more than what he did. There are plenty of reforms to come, including reduced auto tariffs, but no details. But the lack of any ramping-up of the US/Chinese trade-war-by-rhetoric was the key for equities to rally.

President Xi's speech overnight appears to have struck the right tone, providing some relief for investors who have been buffeted by the recent war of words between Trump and China over trade. While there was already an overwhelming sense that Chinese officials were keen to achieve a negotiated settlement before the proposed tariffs do any lasting damage to either the Chinese or US economies, today's speech was the clearest indication yet that China is prepared to take concrete steps to address some of Trump's chief criticisms. The big question is whether President Trump will now take the olive branch offered by Xi's conciliatory approach and dial down the rhetoric from his side too.

Corporate profits have taken a back seat to trade tensions and increased volatility over the past few weeks, but as the US earnings season starts in earnest this week, they will take on huge significance. Equities received a huge boost when the US tax reform bill was signed into law in December and investors will want to see that this is feeding through to the bottom line to justify their continued faith. A good earnings season would do a lot to regain some equilibrium and provide some much-needed relief and calm for beleaguered investors.

8.05am BST

As fears of a trade war between China and the US ease - for the moment - after president Xi's speech overnight, European markets have opened in a positive mood.

The FTSE 100 is up 0.5% or 41 points, while Germany's Dax has added just over 1%, France's Cac has climbed 0.8% and Spain's Ibex is 0.6% better.

7.58am BST

More fallout from the US imposition of sanctions on various Russian companies.

Glencore, which has various contracts with Russia's Rusal for the purchase of aluminium, says it is now evaluating these contracts.

7.41am BST

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

A keynote speech by Chinese president Xi Jinping at the Boao Asian forum overnight has eased some of the concerns about a possible trade war with the US.

When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!

Related: Xi Jinping warns against 'arrogance' amid threat of trade war with US

European Opening Calls:#FTSE 7235 +0.56%#DAX 12373 +0.91%#CAC 5314 +0.95%#MIB 23253 +0.86%#IBEX 9819 +0.79%

Once again it is the background noise that is driving short term sentiment with big swings intraday making the price action difficult to predict. [Xi's] pledges to open up China's economy and lower import tariffs, while nothing particularly new, sent Asia markets higher and are likely to translate into a positive European open this morning. Whether they translate into anything other than words is another story but for now they appear to signal a willingness for China to move forward the discussions on trade with the US.

The raid was in connection with payments to adult star Stormy Daniels and conducted by the Justice Department with help from a referral from the Mueller investigation. The escalation that people are watching out for is that Trump responds by firing Robert Mueller. Political fireworks at home would put extra pressure on delicate trade negotiations.