Retail sales rebound after worst year on record – as it happened

Rolling coverage of business, economics and markets as textiles, clothing and footwear sales drive stronger-than-expected 0.9% improvement

• Economists say election result may have boosted consumer spending
• Air France-KLM sees 125m cost from virus; Qantas at 77m
• Lloyds boss Antonio Horta-Osorio's pay falls by 28% as profits drop
• Victoria's Secret boss to relinquish control after 57 years at parent co

3.00pm GMT

The FTSE 100 is the major holdout across global stock indices thus far on Thursday, up by 0.2%, with Wall Street indices weakening and European stocks retreating from record highs.

Related: Coronavirus takes heavy toll on airlines and shipping firms

2.41pm GMT

Another big Wall Street deal announced today: Morgan Stanley is buying online stockbroking platform E-Trade for about $13bn.

The combination will have $3.1tn in client assets and 8.2m retail client relationships and accounts - with E-Trade shifting the balance towards less wealthy customers and a more direct, lower-cost approach.

2.33pm GMT

Stocks have dipped at the open on Wall Street.

The Nasdaq, the Dow Jones industrial average and the S&P 500 have all fallen by 0.2%.

2.24pm GMT

US stock market futures suggest that Wall Street is going to drop at the opening bell, following the lead of European markets.

The FTSE 100 is the only major index that is not in the red - and it has only edged up by less than 0.1% (possibly thanks to the dollar surge, which makes US earnings relatively more valuable for companies that report in sterling).

1.35pm GMT

The owner of Victoria's Secret will sell a majority stake in the controversial underwear brand at a $1.1bn ($850m) valuation, in a deal that will also see its chief executive resign.

Related: Has Victoria's Secret's offensive attitude towards women finally caught up with it?

1.08pm GMT

Foxconn, the biggest maker of Apple's iPhone, has warned that its revenues will be hit by the coronavirus, but it did not say exactly how big the impact might be.

12.42pm GMT

The European Central Bank's top officials thought that easing trade tensions had reduced risks to the eurozone economy, according to minutes from its latest monetary policy meeting - although the meeting took place before the extent of the coronavirus epidemic became clear.

The meeting of the central bank's governing council ended on 23 January, shortly before Covid-19 was acknowledged as an emergency that could damage the global economy.

The risks surrounding the euro area growth outlook, related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets, remained tilted to the downside, but had become less pronounced as some of the uncertainty surrounding international trade had receded.

It was felt to be important to acknowledge these positive signs and care should be taken to avoid being too slow to change the risk assessment.

11.29am GMT

Who knew that the 20 was the most popular bank note in the UK? Anyway, there's a new one out today.

Related: New 20 notes featuring JMW Turner enter circulation

11.12am GMT

British manufacturers reported an increase in orders this month, according to the the Confederation of British Industry's (CBI) monthly gauge.

The balance of manufacturers seeing increased orders rose to a reading of -18, from -22 in January, slightly above the consensus forecast of -19 from economists. Expectations for the next three months reached their highest since February 2019.

It is encouraging to see manufacturers reporting some early signs of a turnaround in activity, but it's probably still too early to say whether we've seen the end of the slowdown in the sector.

Notwithstanding improving optimism, the sector is still grappling with longer-term uncertainty over the UK's future relationship with the EU.

10.58am GMT

The US dollar is on something of a tear at the moment: the trade-weighted basket of currencies measured against it has hit its strongest level since May 2017.

The Japanese yen has fallen - even though it is usually considered something of a safe haven - amid fears of recession in the world's third-largest economy. It may have also been affected by its proximity to China, the centre of the coronavirus epidemic.

I think this has really brought into focus the role the dollar is playing as a safe haven.

Broadly, we attribute the yen move to a combination of risk-on trade in equity markets, rising headwinds for Japan's economy, and continued US dollar strength. The move may have been exacerbated by other factors, from rising Covid-19 infections in Japan to GPIF [Government Pension Investment Fund] outflows.

10.32am GMT

Some more reaction on the British retail sales rebound. It appears that experts aren't quite convinced that the post-election bounce means the sector is out of the woods.

Kallum Pickering, senior economist at Berenberg, an investment bank, said:

One month does not make a trend. Retail sales are typically quite volatile. However, they do provide an early indicator of the much bigger category of household spending - which makes up about 70% of GDP.

So far, the data just show a rebound from the fourth quarter and not yet evidence of a strong gains to come throughout 2020. However, the uptick in spending along with the sharp improvement in household survey data at the start of the year suits our call that real household consumption is on track to recover solidly in the first quarter (+0.6% quarter-on-quarter) after the disappointing 0.1% gain in the fourth quarter of 2019.

Have UK consumers chosen 'buy more big ticket items' as their New Year's resolution? Though UK retailers will certainly hope so, this will have required a real growth in consumer confidence. Last year was characterised by nervousness in the market, which led to muted spending and frustration for many businesses.

January's ONS figures offer a glimmer of hope that this pent up consumer demand could now slowly be being released, but the jury is still out on this at the moment.

While promising, there is a need to remember the backdrop of this improvement, which has seen failures and insolvencies in the areas with the highest sales - both in terms of physical store footfall and a failure to successfully unify on and offline efforts into one seamless experience.

The need to meet these core customer needs will continue to challenge the sector, with global supply chain efficiencies also playing a key part. Survival of the fittest has never applied more, but as ever, retailers with strong brands and reactive and widely available lines will continue to do well.

10.22am GMT

A just after mid-morning update on markets: the FTSE 100 has given up almost all of its gains to trade flat for the day.

The Euro Stoxx 600 index is down by 0.14%, with Italy's Milan-based FTSE MIB index down by 0.45% amid political uncertainty.

10.18am GMT

Here's the full report on Lloyds Banking Group's profits hit - and some bad news for its chief executive: he is no longer Britain's best paid banking boss, as we earlier reported.

Antonio Horta-Osorio has seen his pay packet fall to a mere 4.7m, a 28% cut.

Horta-Osorio, the chief executive, is now the second-highest paid UK bank boss, behind Barclays' chief executive, Jes Staley. Staley was paid 5.9m for 2019 despite UK regulators launching an investigation over his links to the sex offender and disgraced financier Jeffrey Epstein in December. Horta

Related: Lloyds bank boss takes 28% pay cut after annual profits fall

9.55am GMT

The end of election uncertainty in December may be driving the improvements in the data, economists suggest.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said:

January's official retail sales figures confirm that the decisive general election has released the handbrake of political uncertainty on consumers' spending. The headline number has been depressed by a huge 5.7% month-to-month drop in fuel store sales - the biggest since March 2015 - driven by a rise in fuel prices and bad weather.

First signs that rebound in survey data in UK since December is turning up in hard data. Retail sales (ex fuel) up by fastest rate since May 2018 at +1.6%. The annual run rate remains soft (1.2%) but base case is it will improve during 2020 as pressures on hhld finances ease pic.twitter.com/URASUNtDeo

9.49am GMT

Textile, clothing and footwear stores recorded the strongest increase among the retail sectors, with volumes up by 3.9% compared to the previous month, the ONS found.

Food sales rose by 1.7% month-on-month, counterbalancing a 5.7% fall in fuel sales as prices increased.

9.34am GMT

British retail sales rose by 0.9% in January compared to the previous month, the best performance since March, according to the Office for National Statistics.

The numbers were mainly boosted by "moderate growth" in both food and other stores, despite rising fuel prices dampening volume, the ONS said.

9.22am GMT

Gold prices have held near seven-year highs this morning - after breaking the mark late on Thursday night as the coronavirus outbreak compounded concerns about slowing global growth.

The spot price of a troy ounce of the yellow metal rose above $1,612 late last night - the highest point since March 2013. This morning gold was trading at $1,609.

We continue to see value from an insurance and diversification angle, but would caution that absolute returns may be limited if coronavirus-related disruptions are largely limited to the first quarter.

9.06am GMT

An interesting story from the Belfast Telegraph this morning on the maker of the "Boris bus": Northern Ireland's Audit Office is to probe a 2.5m loan made by Invest NI to Wrightbus just months before the company went into administration.

Sinn Fein's Caoimhe Archibald, chair of the committee, made the call after a number of concerns about the firm's financial affairs were raised by experts in a BBC Spotlight investigation

Wrightbus, based in Ballymena, collapsed into administration in September 2019. About five months earlier, Cornerstone - the firm's parent company - spent 1m buying back the shares held by Wright family member Dr Lorraine Rock, the programme broadcast on Tuesday revealed. [...]

8.54am GMT

The top riser on the FTSE 100 this morning is Smith & Nephew, the maker of medical products such as dressings and surgical devices, after it beat expectations.

Smith & Nephew forecasted another year of revenue growth after topping annual sales expectations for 2019, helped by higher demand from emerging markets and growth in its sports medicine unit.

8.41am GMT

Maersk handles one in every five containers shipped by sea across the world, so it is on the front line of impacts from the outbreak. It has issued a warning on the impacts - but perhaps most strikingly there is no number put on the cost.

The outlook for 2020 is impacted by the current outbreak of the Coronavirus (Covid-19) in China, which has significantly lowered visibility on what to expect in 2020. As factories in China are closed for longer than usual in connection with the Chinese New Year and as a result of the Covid-19 we expect a weak start to the year.

It is still early days to measure the overall impact[. H]owever, the weekly container vessel calls at key Chinese ports were significantly down compared [to] last year during the last weeks of January and the first weeks of February. Freight rates are expected to decrease due to dropping demand for containerised goods transport.

8.10am GMT

European markets have lost some ground in early trading - aside from in the UK, where the pound is slightly lower.

London's blue-chip FTSE 100 is up by 0.2% to about 7,469 points, while the FTSE 250 has gained 0.4%.

8.03am GMT

Britain's best-paid banking boss, Antonio Horta-Osorio, has taken a 28% cut in his 6.5m pay package, as Lloyds Banking Group reported a sharp fall in profits last year, writes the Guardian's Kalyeena Makortoff.

7.55am GMT

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

Few industries have been hit by the impact of the coronavirus outbreak harder than airlines. Air France-KLM and Qantas both reported costly hits to profits on Thursday.

Coronavirus resulted in the suspension of our flights to mainland China and we're now seeing some secondary impacts with weaker demand on Hong Kong, Singapore and to a lesser extent, Japan. Other key routes, like the US and UK, haven't been impacted.