UK economy flatlines in August but grows by 0.7% over the quarter - as it happened

Britain's economy ground to a halt in August but quarterly growth hit 0.7%, boosted by demand for retail and food and drink during the heatwave

• 'New dawn' breaking for UK pay, BoE's Haldane says
• Italy's finance minister seeks to reassure investors
• Patisserie Valerie reveals black hole in accounts

3.00pm BST

The pound has been boosted by hopes that a Brexit deal could be struck after all, but upbeat commentary has yet to be supported with detail.

Sterling is up 0.3% against the dollar at $1.3179, and up 0.2% against the euro at a1.1445.

2.37pm BST

The opening bell has rung and US markets are lower:

2.18pm BST

Patisserie Valerie has just published another trading update, after revealing this morning potentially fraudulent accounting irregularities.

The company and its advisors are in communication with HMRC with the objective of addressing the petition.

The company continues to engage with its professional advisers to understand better the financial position of the Group and will make further announcements in due course.

1.20pm BST

Julian Jessop at the Institute of Economic Affairs says the latest GDP figures from the ONS suggest the UK economy is on course to grow by 0.6% in the third quarter (July to September).

That would be the fastest rate since the final quarter of 2016, when the economy grew by 0.7%.

ICYMI (I did), ONS data this morning suggest UK #GDP grew by 0.7% in the three months to August. Some special factors at play, but notable that economy is picking up again (#despiteBrexit). Best guess at Q3 growth now around 0.6% q/q. pic.twitter.com/8d0eGfer4o

12.29pm BST

Italy's finance minister, Giovanni Tria, has attempted to ease investor concerns over the government's plans to increase spending.

We will try to do everything we can to regain the confidence of markets.

11.36am BST

Andy Haldane, chief economist at the Bank of England, has been speaking about pay this morning at a conference in London.

Evidence for a "new dawn" in British wage growth after years of sluggish pay rises has strengthened over the past year, though the pace of the pick-up is likely to be limited, the Bank of England's chief economist Andy Haldane said on Wednesday.

Haldane linked the modest forecast pick-up in pay with financial market expectations for the central bank to raise interest rates by about a quarter of a percentage point a year over the next three years.

11.25am BST

The Treasury has responded to the latest GDP figures, and says the national debt is falling, so the government can spend more on public services and keeping taxes as low as possible.

Does this mean the chancellor Philip Hammond is planning to unveil tax cuts and spending increases? We'll find out when he delivers the budget on 29 October.

We are building a stronger, fairer economy, and have made great progress repairing the public finances and helping more people into work.

Our debt is starting to fall, so we can spend less on debt repayments and invest more in public services, while keeping taxes as low as possible.

11.06am BST

Lee Hopley, chief economist at the manufacturing trade body EEF, the manufacturers' organisation, says the UK economy returned to "business as usual in August":

The main take away from today's bumper crop of releases on the economy is that the UK saw a spurt of activity in June and July not seen since the end of 2016. Beyond that it seems that it's back to business as usual more or less in August.

The underlying services picture looks to be slow and steady, the construction sector has recovered its weather-related losses from earlier in the year and manufacturing weakness is persisting in the second half of this year so far.

10.47am BST

Jonathan Reynolds, Labour MP and shadow Treasury minister, says the ONS figures show the UK economy is underperforming:

This month's GDP figures confirm that the economy continues to underperform under the Tories, with growth below its historical trend and real wages still below their 2010 levels.

Only Labour has a plan to transform our economy and boost real pay, with a 10 hour minimum wage and investment for the whole country.

10.33am BST

John Hawksworth, chief economist at PwC, says Brexit uncertainty is likely to be a drag on growth in 2018.

Overall, the pattern of UK growth this year has been heavily affected by the weather, with the unusually long and cold winter dampening growth in the first quarter while the relatively warm spring and summer boosted growth in the second and third quarters of the year.

But aside from these seasonal variations, the underlying trend is for moderate UK growth at a rate of around 1.5% per annum. This is somewhat below its longer term trend rate of around 2% and reflects the continued drag on business investment in particular from Brexit-related uncertainty. This seems likely to continue into the fourth quarter of 2018, when we expect some moderation of UK growth to around 0.3-0.4%.

10.05am BST

The UK failed to grow in August according to the latest monthly estimates from the Office for National Statistics.

Zero growth followed a 0.4% rise in GDP in July, which was revised up from a previous estimate of 0.3%.

The economy continued to rebound strongly after a weak spring with retail, food and drink production and housebuilding all performing particularly well during the hot summer months. However, long term growth continues to lag behind its historical trend.

A large drop in imports of non-monetary gold alongside a jump in oil exports helped narrow our trade deficit with the world.

9.29am BST

Britain is near the bottom of the international rankings for the strength of its public finances according to the IMF, ahead of only Portugal.

The figures show the UK government has 5tn in liabilities, but less than 3tn in assets, leaving it with a negative net worth of more than 2tn.

Related: UK public finances are among weakest in the world, IMF says

8.53am BST

It's a sea of red across European markets this morning, as investors struggle to find reasons to cheer.

Here are the latest scores:

8.26am BST

Patisserie Valerie has some unsavoury news this morning. The bakery chain has uncovered irregularities in its accounts that are "potentially fraudulent".

The firm has suspended Chris Marsh, its finance director, and its shares on AIM have been suspended from trading.

We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible.

8.11am BST

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

Global investors are on edge, as they wait to see how a number of major situations play out.

Uncertainty is prevailing in the financial markets, we are seeing more investors opting to wait and see how risks surrounding rising US treasury yields, global growth and China play out.

Near term risks to global financial stability have increased rapidly over the past few months. The markets have been relatively complacent, but we are starting to see an acknowledgement of these risks which is keeping traders on the side-lines.