Stocks rise but dollar slides after Federal Reserve raises US interest rates - as it happened

Wall Street is reassured by 'dovish hike', as Chair Janet Yellen says the US economy is doing well

• What the experts say
• Wall Street jumps, dollar hit by dovish hike
• Fed chair says US economy doing well
• Janet Yellen holds press conference - highlights start here
• Fed votes to raise interest rates for third time since 2008
• Statement: economy continues to expand

8.42pm GMT

That's all for us for tonight. Here's our news story about the Federal Reserve rate rise:

The US Federal Reserve has sought to head off rising inflation with a third interest rate rise since the 2008 financial crash and the second in three months, taking the base rate from 0.75% to 1%.

The central bank set aside concerns about the impact of higher interest rates on consumer spending to confirm analyst projections that it is prepared to increase rates several times this year to keep a lid on inflation as it rises above its 2% target level.

Related: US Federal Reserve raises interest rates to 1% in bid to hold off inflation

8.39pm GMT

Caution was the order of the day as the Fed took another step towards normalising monetary policy.

So says our economics editor Larry Elliott, who writes:

The key messages from Janet Yellen on Wednesday were that rates will continue to rise but at a cautious pace. She stressed that the central bank expected the economy to grow at a rate that would warrant gradual increases in interest rates. That will be taken as a hint that there will be two more rises during the course of 2017.

The Fed has now raised interest rates three times in the past 15 months. Clearly, the period of ultra-low borrowing costs is at an end. The so-called normalisation of rates is under way.

Related: US interest rate rise signals end of ultra-low borrowing costs

8.27pm GMT

Lena Komileva of G+ Economics says the Federal Reserve has achieved a 'dovish tightening' of monetary policy with today's rate rise.

Having test-driven a more hawkish communication strategy in the markets in the run-up to this month's rate hike, the Fed's unchanged gradualist stance and Chair Yellen's measured tone about the Fed's pursuit of a neutral policy stance have calmed investor nerves.

The Fed's hand is clearly guided by greater confidence in guiding the economy towards its dual inflation and full employment mandate, rather than a desire to start a bonfire in bond markets.

We have seen a slight upgrade to its view on business investment, which seems fair and while the Fed see inflation "moving" to target they stipulated that the committee will carefully monitor actual inflation developments relative to its "symmetric inflation goal".

One could argue this seems even a touch dovish, as it effectively signals that the Fed feel there are risks of inflation moving above its target of 2%. They are indirectly urging market participants to focus far more heavily on core inflation or PCE, given the volatility and unpredictability of energy and food prices.

As everyone expected following the recent blitz by officials to prepare the markets, the Fed raised the fed funds target by another 25bp today, to between 0.75% and 1.00%, but officials left their interest rate projections largely unchanged. As a result, this hike won't prompt markets to revise up expectations of how fast monetary policy will be tightened over the next few years.

"While the Fed hiked interest rates, Kashkari voted against, showing not all FOMC members agree it's the right time to normalise monetary policy. This contradicts the recent bullish market consensus.

"Markets are reassessing the future path of interest rate hikes, which is putting downward pressure on the dollar. The market had started to price in a total of four hikes this year, assuming the Fed was ready to begin an aggressive path of monetary tightening, but that is clearly no longer the case.

"In all, the Fed looks unlikely to 'take away the punchbowl' from global growth any time soon. Our base case is only one more hike this year. This is because we are likely reaching a cyclical peak soon, and the likelihood of a China slowdown weighing on global inflation, markets and growth is fairly high."

8.17pm GMT

The US dollar has suffered its biggest one-day drop since January.

That underlines that the Federal Reserve was less hawkish than some investors expected today.

8.11pm GMT

DING DING: The closing bell has rung on Wall Street, with the main indices all up after the Fed rate decision.

8.05pm GMT

Shares may be up today, but Goldman Sachs is worried that the rally may be over.

Earlier today the bank's strategists lowered their three-month outlook for global stocks to neutral, while staying overweight cash and underweight bonds.

7.43pm GMT

The US stock market is continuing to climb.

The Dow is now up 127 points, or 0.6%, at 20,966, with less than 20 minutes until the closing bell.

Tech investors love Yellen. Nasdaq now only about 3 points from all-time high. Nasdaq 6,000 is less than 100 points away.

7.41pm GMT

The US dollar continued to slide against other major currencies as Janet Yellen held her press conference.

Traders are concluding that the Fed is still only planning to tighten monetary policy gradually - given policymakers expect two more hikes this year, and three in 2018.

#Euro jumps above $1.07 as Yellen is suddenly the best friend of Trump. Welcomes growth policy which is "not a point of conflict" w/ admin. pic.twitter.com/o08zyV2eEu

7.35pm GMT

7.32pm GMT

Last question:

Q: Some people think it's too early to raise interest rates, because wage growth has been too low.

7.24pm GMT

Asked about regulatory issues, Yellen replies that the Fed has a "relatively light" regulatory agenda at present.

There's nothing we need to get out right now, she adds.

7.20pm GMT

Yellen is asked about the possibility of a border tax.

She says it's "very uncertain" how the dollar would be affected by such a move.

7.19pm GMT

Q: The Fed's statement today says that your inflation target is symmetric - so how high would you be happy to see inflation rise?

Two percent inflation is not a ceiling, it's a target, Yellen replies. There will be times when it will be above that target.

7.17pm GMT

Q: What message are you trying to send to US consumers with this interest rate hike?

Great question, Yellen replies, before declaring:

The simply message is that the economy is doing well

Fed Chair Yellen on what her message to consumers is with today's rate hike: "The economy is doing well." https://t.co/qcDqs8EGGW pic.twitter.com/CAdmNZVDLF

7.13pm GMT

Yellen is asked about calls for a new Glass-Steagall Act (to prohibit commercial banks getting involved in risky investment banking).

"I don't know what a 21st century Glass-Steagall would look like," Yellen replies wryly.

7.10pm GMT

Q: The latest GDP figures weren't very impressive, unemployment hasn't changed much, and consumer spending isn't roaring - so why do you feel forced to raise interest rates today?

Yellen replies that GDP is quite a 'noisy' indicator. Other economic data suggests the economy continues to strengthen.

SPOTTED: GDP as defined by Janet Yellen#Noisy pic.twitter.com/s6ZjYV3yoY

7.04pm GMT

Q: Are you worried about the consequences if Donald Trump's proposed tax cuts and spending increases aren't enacted?

Yellen says there is an obvious, notable shift in sentiment - but there's no sign that this has translated into higher spending. The Fed is watching closely in case this changes.

Yellen: "I haven't seen hard evidence of any change in spending decisions based on expectations about the future."

7.01pm GMT

On the global economy, Yellen says the situation has improved.

But there are still uncertainties, which G20 finance ministers and central bankers will discuss at their meeting this weekend.

7.00pm GMT

Yellen is asked about the recent strong stock market rally.

She says that the higher level of equities has helped to ease financial conditions.

Yellen: Financial conditions on balance have eased, that's partly driven by stock market. That is a factor that affects outlook.

6.57pm GMT

Frances Donald of Manulife Asset Management believes Yellen will be pleased to see the dollar falling.

Janet Yellen wins today if she manages to tighten rates and USD ends the day lower. There is no better outcome for the Fed than that.

Steve Liesman went there. He asked why they left out the word 'only' in a segment or the statement

...and she responds coyly, suggesting it is a trifle change of language. Yellen is fooling no one. They clearly chose every word carefully

6.55pm GMT

Q: What do you think the neutral real rate of borrowing costs is?

Yellen says that lower productivity, and population increases, means that the neutral rate is lower than in the past.

Yellen: neutral real rate about 1% or a bit lower.

6.51pm GMT

Q: Have you met with new Treasury secretary Steven Mnuchin since he was appointed? And have you met Donald Trump?

Yellen says she has met Mnuchin a couple of times, and fully expects to have a strong relationship with him.

6.49pm GMT

Q: Has the Federal Reserve considered the implications of Donald Trump's fiscal stimulus plan?

Yellen says they've not discussed it, as there is "great uncertainty" over the character and size of potential policy changes.

Yellen says Fed not planning for @realDonaldTrump policies...

6.45pm GMT

Q: You warned that if the Fed were to waiting too long to raise rates, it could be forced into a "rapid" increase in rates. What would this look like?

Yellen says that she can't really say what a rapid rate of increases would be. But three rate hikes in a year is certainly 'gradual'.

Yellen: "I'm not sure I can tell you what a rapid rate of increase is." Says 3 rate hikes this year would be "gradual."

6.42pm GMT

Onto questions.

Q: What conditions does the Fed want to see before it starts to normalise its balance sheet? (ie, selling some of the assets bought under its stimulus programme since the financial crisis).

6.39pm GMT

The economic outlook is 'highly uncertain', Yellen continues, adding that policy is not on a preset course.

Fed's Yellen: Economic Outlook Is Highly Uncertain

6.38pm GMT

Monetary policy is still accommodative, after today's rate rises, Yellen says.

She warns that if the Fed were to wait too long before normalising policy, it could be forced to raise borrowing costs more rapidly "sometime down the road", causing disruptions in the financial markets.

6.35pm GMT

Yellen sounds confident about the labor market, saying Fed policymakers "expect that job conditions with strengthen somewhat further."

6.34pm GMT

Yellen says that today's interest rate hike is in response to the ongoing recovery in the US economy, and improved conditions in the labor market.

Our decision to make another gradual reduction...reflects the economy's continued progress toward its employment/price stability objectives, the Fed chair explains.

6.32pm GMT

Fed chair Janet Yellen is holding a press conference to explain today's decision.

You can watch it live here:

6.30pm GMT

You might expect a currency to strengthen when its central bank raises interest rates. But not today.

The dollar is now down almost 1 cent against the euro, at $1.068.

The dollar is tumbling on the Feds move https://t.co/WHjA0O4zRl pic.twitter.com/i74Oy4N1Rs

6.28pm GMT

Nick Dixon, Investment Director at Aegon UK , says Janet Yellen has delived what Wall Street expected:

"Strong economic and job data from the US has only increased calls on Yellen to hike interest rates, so it is no surprise to see the rise today.

Investors will now keep a close eye on the forward look for indications on when the next UK rate rises are scheduled, and today's US increase adds momentum to the case for this.

6.19pm GMT

Significantly, the Federal Reserve has also stated that its inflation target is symmetric.

In layman's terms, that means it is prepared to tolerate prices rising faster than its 2% target. That's a dovish signal (which explains why the dollar has fallen)

#FOMC hikes #rates 25bp, statement mostly as expected EXCEPT on inflation where they seem to start to contemplate inflation overshoot

6.16pm GMT

Wall Street likes what it sees! The Dow Jones index has now jumped by 86 points to 20,929, a gain of 0.4%.

The S&P 500, and the tech-focused Nasdaq index, are both up.

10yr US real yields and the BBG dollar index.falling in unison. Might be time for a beer pic.twitter.com/qSOGltLwGZ

6.14pm GMT

Today's statement shows that the Fed still believes that the US economy continues to recover, and can cope with higher borrowing costs.

It says that 'fixed investment' by US firms appears to have firmed; that indicates that companies are confident about growth prospects.

Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace.

Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat.

6.08pm GMT

Here's the new Fed dot plot, showing where policymakers expect interest rates to be over the next few years.

There are a few minor moves, but the bottom line is that the Fed still expects three rate hikes this year, and in 2018.

Dot Plot March 2017 vs. December 2016: pic.twitter.com/76hoI1H5cl

6.06pm GMT

The Federal Reserve still expects to raise interest rates three times this year (including today's move).

Mean of FOMC's 2017 dots rose to 3.1 hikes from 3.0

6.04pm GMT

The decision to raise US interest rates is not unanimous, though!

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, argued against a rate hike.

*FED RAISES BENCHMARK RATE TO 0.75%-1%; KASHKARI DISSENTS

6.00pm GMT

Breaking! The Federal Reserve has voted to raise US interest rates at today's meeting.

The Fed has responded to the latest solid economic data by hiking borrowing costs by a quarter of one percent.

5.58pm GMT

Not everyone is excited, though....

Waiting on the fed like pic.twitter.com/EWdZwgtptt

5.50pm GMT

The excitement is building....

10 MINUTES TIL FED

5.43pm GMT

This was the scene on Wall Street a little while ago, as traders got ready for the Fed's decision on interest rates:

The Fed is a pussy-cat that would like to change its spots into something more like a leopard's. In practical terms, that means that this evening's FOMC announcement (6pm GMT, with a press conference half an hour later) is all about the Fed's projections rather than whether they raise rates or not.

Anything other than a 25bp rate hike would be a huge surprise to the market

5.28pm GMT

While we wait for the Fed rate decision, this piece in the FT () entitled Brexit means the end of single market access for London is an interesting read. Christian Noyer, the former chairman of the Bank for International Settlements and former governor of the Banque de France, writes:

Will London's financial institutions lose access to the single market after the UK leaves the EU? When one looks at the legal framework, underlying logic and, in particular, precedents from the European Economic Area, the answer is yes. "Brexit means Brexit."

There are three conditions for full access to the EU single market and "passporting rights" for financial institutions. First, implementation of EU regulations under the control of the European Court of Justice; second, payment of a sizeable contribution to the EU budget; and third, the "four freedoms". A country refusing to meet these conditions cannot be part of the EU single market because it rejects the market's logic. It's as simple as that.

5.21pm GMT

European stock markets have now closed.

5.17pm GMT

Renaultgate? Shares in the French carmaker fell today after a French newspaper report claimed its vehicles were equipped with software allowing them to cheat in pollution tests.

Libi(C)ration said it had obtained an investigative document from the economy ministry, which indicated that two models - the Renault Captur and the Clio IV - spewed emissions more than 300% above the legal limit in real-life conditions.

As a consequence, Renault cannot confirm the veracity, completeness and reliability of the information published in the said article. Renault will prove its compliance with the regulations and reserves its explanations for the judges in charge of investigating this case.

4.24pm GMT

In London, gains on the FTSE 100 are led by oil and mining firms, keeping the index close to its recent all-time high. But this could change after the Fed decision.

Chris Beauchamp, chief market analyst at online trading platform IG, said:

Indeed, European and UK equities have been more resilient of late than their US counterparts, with some of this down to weaker domestic currencies. The risk for the likes of the FTSE and the Dax is therefore that a less hawkish Fed tonight could spike a rally for sterling and the euro, causing some of the most recent outperformance to reverse.

Overall today has felt like a market that is in dire need of a catalyst, so traders will be hoping that Janet Yellen provides just that.

4.12pm GMT

On currency markets, the dollar slipped after the disappointing retail sales data - despite expectations of a rate hike from the Fed later today. There are question marks over the rate outlook further out, given the uncertainty surrounding Trump's fiscal policy. The dollar index drifted 0.2% lower.

The Fed's "dot plots" - its interest rate projections - currently suggest three rate hikes this year but there is concern that the Fed's language may sound more dovish than before.

3.53pm GMT

Markets are calm ahead of the eagerly awaited Fed decision, with European stock markets holding on to their gains.

3.37pm GMT

Also, delays in processing tax refunds by the US government weighed on consumers' ability to spend in February. Compared with February last year, retail sales were up 5.7%.

3.34pm GMT

Inflation in the US hit a five-year high last month, rising to 2.7%, as we reported earlier.

At the same time, retail sales weakened, as households bought fewer cars and cut back on discretionary spending, according to the latest data published today. Retail sales rose just 0.1% in February, the weakest reading since August, suggesting the economy lost some momentum in the first quarter.

Overall, inflation is trending gradually higher and underlying retail sales are healthy enough. Nothing here to suggest the Fed shouldn't raise interest rates at the FOMC meeting that concludes later today.

3.23pm GMT

Jane Sydenham, investment director of Rathbones Investment Management, says that because a Fed rate hike at today's meeting has already been priced in, the impact on markets is likely to be small.

After flag waving for more than a year, it would be surprising if Yellen didn't take the opportunity to raise rates today, especially in light of all the positive data. Facing such a known unknown, markets have almost certainly priced this in and the impact is likely to be minimal.

What investors need to be more mindful of is that this may be just the first of three possible rate rises this calendar year, but other rises will be dependent on continuing strength in economic data and an inflation rate that remains at a manageable level.

3.13pm GMT

So much for Janet Yellen's suggestion that the Fed could run the economy "a little hot" to undo damage of recession https://t.co/dKbs3Txnpl pic.twitter.com/bJ2DGmn9YR

3.10pm GMT

Paul Sirani, chief market analyst at brokerage Xtrade, believes that tonight will mark the beginning of a series of Fed rate hikes, and the Bank of England could soon follow suit.

The way the US economy is moving at the moment, we can see the Fed raising interest rates at least three, if not four, times this year. Although, if Donald Trump gets his way then it will almost certainly be the latter.

Business in the US is arguably strong enough to dust off rates up to 2% this year, but Janet Yellen will be wary of moving too fast with plenty of political uncertainty still circling in Europe.

2.51pm GMT

Sam Fleming of the FT has written a preview of today's Fed meeting.

Here's a flavour:

It would now be a significant shock if the US central bank did not lift the target range for the federal funds rate by another quarter point from the current 0.5 per cent to 0.75 per cent.

The chances of a move were seen by markets at around 95 per cent going into the meeting, according to a CME Group analysis of futures prices. So the issue for investors is judging whether the next move could come as soon as June and whether there is the possibility of four increases this year, rather than the three predicted in December.

What to watch at the Fed meeting https://t.co/CveHqW9l6l

1.37pm GMT

Over in New York, shares are rising at the start of trading.

The Dow Jones industrial average, the S&P 500 and the Nasdaq are all showing modest gains, as investors get ready for the Federal Reserve meeting.

"Today's figures show inflation climbed to a five-year high for the second consecutive month, reinforcing strong expectations of a Fed interest rate hike on Wednesday.

"Under current levels of inflationary pressures, Janet Yellen has little choice but to pencil in a first rate when the Fed convenes later today.

1.00pm GMT

Just in: America's inflation rate has hit its highest level since March 2012, underlining why US interest rates are likely to rise later today.

The US consumer prices index rose by 2.7% year-on-year in February, up from 2.5% in January. On a monthly basis, prices crept up by 0.1%.

US Feb CPI no game changer, Citi says. CPI surprised a bit to the upside on a MoM basis, BUT was inline otherwise, including core data. pic.twitter.com/VwpIv4KTXP

12.46pm GMT

And here's economics editor Larry Elliott, on the worrying slowdown in wage growth:

Average earnings in the three months to January were 2.3% higher than a year earlier: in the three months to December 2016 they rose at an annual rate of 2.6%.

These figures speak volumes about the modern labour market and in particular how the balance of power has shifted in the past four decades. Even when jobs are relatively plentiful and inflation is picking up, workers are unwilling or unable to press for higher pay.

Related: UK unemployment is as low as 1975 - but why aren't wages rising?

12.32pm GMT

Here's Angela Monaghan's take on this morning's UK unemployment report:

Britain's unemployment rate has fallen to its joint lowest level since 1975 but wage growth also slowed in a sign of the fresh squeeze in living standards facing UK households.

The jobless rate fell to 4.7% in the three months to January from 4.8% in the previous three months, matching the rate last seen in 2005. It was last lower in the three months to August 1975, when it was 4.6% according to the Office for National Statistics.

Related: UK unemployment falls to joint lowest rate since 1975 but wages stall

11.59am GMT

Some reaction to Philip Hammond's handbrake turn on the NICs increase:

Overheard in newsroom: "Good news for Barnier and his team: if you can roll over the govt on NICs then wait til the Brexit negotiations."

Absolutely no chance the UK government will buckle under pressure from right-wing press on anything Brexit related.

I bet Philip Hammond doesn't find his joke about Lamont being sacked 10 weeks after delivering a "last Spring budget" so funny anymore

No opposition, new team in govt, charging to Brexit, still found a (home-grown) banana-skin to fall over on. Good Job! https://t.co/5nP4ZExAay

11.51am GMT

I wonder if Philip Hammond is now regretting making that joke about his predecessor, Norman Lamont, getting sacked.....

Here's what he said during last week's gag-filled Budget speech:

The Treasury has helpfully reminded me that I am not the first Chancellor to announce the "last spring Budget"

Twenty four-years ago Norman Lamont also presented what was billed then as "the last Spring Budget".

11.47am GMT

Oh my goodness! Philip Hammond, the UK chancellor, has just ditched his plan to raise tax rates on the self-employed.

In a very embarrassing u-turn, Hammond has decided to abandon his proposed changes to Class Four National Insurance Contributions, announced in last week's budget.

Hammond is dropping the National Insurance tax rise! Announces in letter to Andrew Tyrie, chair of the Treasury select committee

Related: The Treasury drops NICs increase for self-employed in major U-turn - Politics live

11.33am GMT

Today's report also shows that the UK employment total rose by 92,000 in the last three months, to a new record high of 31.854m.

Employment Minister Damian Hinds says it's a good sign:

"I'm delighted by another set of record-breaking figures showing more people in work than ever before and unemployment falling to its lowest in 12 years.

"Employment is up, wages are up and there are more people working full-time. This is good news for hard-working families across the UK as we continue to build a country that works for everyone.

11.03am GMT

The recovery in Britain's jobs sector in recent years has not been shared equally across the country.

This chart, from the Resolution Foundation, shows how some parts of the country have enjoyed strong growth creation, while others are lagging.

10.43am GMT

The drop in real wage growth, to just 0.8%, is "terrible news", warns the Resolution Foundation.

Weak pay rises and rising inflation mean that a fresh squeeze is due later this year, and has already begun for some workers, especially in the public sector.

"The incredibly poor outlook for pay has pushed a return to pre-crash earnings back well into the next parliament, making the 2010s the weakest decade for pay growth since the Napoleonic wars.

10.35am GMT

Ian Kernohan, Economist at Royal London Asset Management, is also concerned by the weak pay growth.

He believes it will prevent the Bank of England raising interest rates this year.

Regular pay growth was disappointing at just 2.3%, and with inflation rising, a squeeze on real household incomes is a major reason why we expect economic growth to slow this year. We expect the MPC to keep interest rates on hold until 2019 at the earliest."

10.31am GMT

A couple more charts from today's report:

10.25am GMT

The drop in average earnings (ex bonuses) to 2.3% per year in November-January means that real wage growth has dropped again.

UK inflation was 1.2% in November, 1.6% in December, and a blistering 1.8% in January. So real wage growth was actually only around 0.8%.

"UK jobs growth was more robust than expected in the three months to January, rising by over 90,000 compared to the previous three months. The momentum of jobs growth actually looks somewhat stronger now than a few months ago, while the unemployment rate fell to 4.7%, its lowest level since 1975. For the moment, the jobs market remains in fine fettle.

"There was less good news on average earnings growth, which fell back to just 2.2% in the three months to January. With consumer price inflation already up to 1.8% in January and set to rise further over the coming months, real earnings growth could be back in negative territory by the end of 2017. This is likely to dampen consumer spending, which could eventually feed through into slower jobs growth as well."

10.14am GMT

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), says the UK labour market seems to be in good shape:

"The UK's jobs market is going from strength to strength, with the number of people in work continuing to rise and unemployment also falling.

"UK labour market conditions may cool over the next few years as the expected slowdown in growth and the rising burden of upfront business costs stifle firms' hiring intentions. That said, we expect that the UK unemployment rate will reach a peak of 5.3% next year, still some way below the historical average.

"However, average pay growth continues to slow, and it appears increasingly likely that inflation will outstrip earnings growth in the coming months, which will put further pressure on consumer's spending power.

10.04am GMT

The number of self-employed people in the UK is rising faster than the number of employed workers, today's report shows.

The ONS reports that in the last year:

"The latest labour market statistics show a large rise in employment and a fall in unemployment (with the rate down to 4.7%). The big gain has come from full-time self-employment - a rise of some 94000 on the quarter - perpetuating the apparent ascendancy of the gig economy.

"Over the last quarter of 2016 there was a large rise in employment in construction - some 36000 new jobs in this sector. The fall in unemployment is patchy across regions, with the latest regional data indicating increases in both London and the West Midlands.

"Increases in total pay, however, continue to be moderate, with the three month average now growing at an annual rate of 2.2% (down from 2.6% last month). Specifically in construction, the rate of growth has collapsed, and this may be an early sign that the employment growth in that sector may not last."

9.57am GMT

Technically, Britain's jobless rate is now at its joint lowest for 42 years.

The unemployment rate also fell to 4.7% in 2005. It's not been lower since the heady days of 1975, the year Queen released Bohemian Rhapsody, and Monty Python and the Holy Grail hit the screens.

9.47am GMT

Here's the key points from today's UK jobs report (which is online here)

Unemployment down, employment up, pay growing faster than prices (for now). All the arrows pointing firmly in the right direction. pic.twitter.com/pMCJzZV7cH

9.34am GMT

Breaking! Britain's unemployment rate has fallen to its joint lowest level since 1975, at 4.7% in the three months to January.

That's down from 4.8% a month ago, according to today's report from The Office for National Statistics.

#Unemployment rate (for people aged 16+) 4.7% for Nov-Jan 2017; last time lower was 1975 https://t.co/Ff0ljvciPy pic.twitter.com/hzwdAW3YT8

9.25am GMT

Here's a reminder of how real pay growth (wages minus inflation) has slowed in the last few months:

As price inflation continues to rise, eyes will once again turn to today's figures for UK earnings growth. pic.twitter.com/5DVQP1x2jM

8.58am GMT

Jordan Hiscott, chief trader at ayondo markets, believes European investors will be crossing their fingers and hoping that the liberal VVD party led by Mark Rutte wins the most seats in today's Dutch election.

"Tomorrow's Dutch elections could be yet another watershed moment for Europe, leading to further political fragmentation. With a country known for its liberal traditions, it's been surprising that Geert Wilders and his PVV party have managed to assert themselves so much, taking the lead at some point in the last few weeks.

"Most recently though the VVD - the People's Party for Freedom & Democracy - has re-taken the lead and investors looking for stability in the financial markets will welcome this. The possibility of the PVV coming to power, with its anti-EU stance, could have had a dramatically effect on the EUR FX and Dutch equities markets, both largely negative.

"In Dutch politics the vote is not the beginning of the end but the end of the beginning." https://t.co/potdgNGY7N

8.51am GMT

European stock markets are up across the board this morning.

The FTSE 100 has gained 0.2% to 7,373 points - less than 20 points shy of its all-time high.

There isn't a lot for the region to do today, so any political news out of the Netherlands might be its main driver of movement as Wednesday progresses.

Any delays in government formation in #Netherlands spells trouble for #Greece and conclusion of second review. Dutch parliament must approve

8.36am GMT

The pound is having a good morning, jumping almost one cent against the US dollar to $1.223.

"They should lay the ground in the accompanying minutes for a possible increase in interest rates at their next meeting."

8.16am GMT

There's a chance that Britain's jobless rate could hit a new 11-year low of 4.7% today, down from last month's 4.8%.

That's according to RBC Capital Markets, who also predict that wage growth will slow.

Last month's strong report emphatically removed the skew of risks on the unemployment rate rising from 4.8% to 4.9%. Indeed, if anything, the skew of risks on this occasion is that it could actually drop to 4.7% but our central expectation is that unemployment holds at 4.8% for a fifth consecutive month.

The 3m/3m employment level looks set to post a healthy gain too as the recently softness provides a relatively easy comparator for the latest data. The 37k 3m/3m gain last time should well at least be matched on this occasion.

7.46am GMT

More than eight years after bailing Lloyds Banking Group out, the British government has taken another step towards the exit door.

The UK has sold another slice of Lloyds shares, taking its stake below the 3% level.

"Lloyds' recent annual results show that we are in a good position to reduce our shareholding further and expect to recover all of the money taxpayers injected into the bank during the financial crisis."

Government stake in Lloyds falls again to below 3%

"Today's announcement moves Lloyds another step closer to full private ownership" says Lloyds

7.43am GMT

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

Central bankers like to avoid surprising the markets. So with everyone expecting a US interest rate rise tonight, there's no reason for the Federal Reserve to worry about announcing its first hike of 2017.

Dutch PM Mark Rutte 'boosted by spat with Turkey' as election nears https://t.co/2WES97kp02

Our European opening calls:$FTSE 7364 up 6
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