City watchdog to take no action over RBS mistreatment of customers - as it happened

GDP growth slows in eurozone. Dixons Carphone says 10m accounts accessed in breach. City watchdog report on RBS's GRG business

2.52pm BST

It's been a busy day for economic and corporate news.

And a good one for relieved executives at Royal Bank of Scotland, who have been told that the City watchdog does not have the powers to take action against them over the mistreatment of business customers by the bank's GRG division. The chair of the Treasury Select Committee said it was bewildering the Financial Conduct Authority could not act.

2.38pm BST

US markets have made a positive start to the trading day, helped by a rebound in technology stocks and the upbeat consumer spending figures. Shares were also supported by talk that the US and China were looking to re-start discussions about the current trade dispute.

The Dow Jones Industrial Average is currently up 95 points or 0.36% while the S&P 500 opened up 0.33% and the tech heavy Nasdaq Composite added 0.37%.

2.05pm BST

US consumers are continuing to spend, especially on restaurants and accommodation.

The commerce department said consumer spending rose by 0.4% in June, in line with expectations. The May increase was revised upwards from 0.2% to 0.5%. The personal consumption expenditures price index - excluding food and energy - rose by 0.1%, compared to a 0.2% rise in May.

1.26pm BST

Another call for the Financial Conduct Authority to publish its full report on the Royal Bank of Scotland/GRG scandal, this time from the Federation of Small Businesses. Its chairman Mike Cherry said:

There's nothing in the current legislative framework to stop another GRG-type scenario. As long as commercial lending remains unregulated, small firms will be vulnerable. The hope is that - as the FCA claims - the new Senior Managers Regime will lead to a more responsible lending climate in future.

Too often, the regulator doesn't recognise that small business owners have far more in common with consumers than big corporations. Where you have personal guarantees for example - small business owners putting personal assets on the line to secure a loan - then surely that should be deemed consumer, regulated lending.

12.32pm BST

The All Party Parliamentary Group on Fair Business Banking, which includes members from both the House of Commons and the House of Lords, said the City watchdog should release all its information about the GRG case. In a statement, the group said:

At the APPG we are extremely disappointed, but largely unsurprised, by [the FCA] announcement. It is simply not good enough from a regulatory perspective to say that the powers to hold individuals to account simply do not exist.

Kevin Hollinrake MP, Co-Chair of the APPG, said: "The FCA should release all findings and evidence they have obtained in their investigation of RBS GRG, unredacted so that the individuals who are responsible for this misconduct are in the public domain. The FCA have an obligation to release this information so that politicians can have a say in whether it is truly the case that no further actions can be applied. As lawmakers we have an obligation to the public to ensure that those who are responsible are accountable and not untouchable, as indeed is the case now where the individuals responsible are protected by the regulatory inadequacy of our current system".

11.39am BST

In the wake of the Financial Conduct Authority saying it does not have sufficient powers to disciple Royal Bank of Scotland executives over the GRG scandal, the head of the Treasury Select Committee has called for a review into whether new legislation is needed. MP Nicky Morgan MP said:

It will be disappointing and bewildering for those who got caught up in GRG's actions that the FCA is not able to act. This demonstrates the need for a change in how lending for SMEs is regulated. The Government should stand ready to introduce any legislation required when it sees the outcome of current reports on redress and should also urgently consider what additional powers the FCA requires to act in cases such as GRG.

11.09am BST

Here's Reuters wrapping up the day's eurozone economic news:

The euro zone economy grew more slowly than expected in the second quarter, preliminary data showed on Tuesday, but headline and core inflation accelerated with unemployment stabilizing at a lower level.

The European Union's statistics office Eurostat estimated that gross domestic product in the 19 countries sharing the euro expanded 0.3 percent quarter-on-quarter in the April-June period and was 2.1 percent higher against the same period of 2017.

Core inflation, which excludes energy costs as well as unprocessed food and which the European Central Bank looks at in policy decisions, also rose to 1.3 percent year-on-year from 1.2 percent in June, beating economists expectations.

An even narrower core inflation measure that economists pay attention to, which excludes also the costs of alcohol and tobacco, also rose to 1.1 percent from 0.9 percent in July - again, above expectations.

Euro zone economic growth slows in second quarter, inflation accelerates https://t.co/GAMqoRy5fi via @Reuters pic.twitter.com/hHORuU5lCT

10.41am BST

Commenting on the eurozone inflation figures, Joshua Mahony, market analyst at IG said:

Eurozone inflation data has pushed pressure back onto Mario Draghi & co, with headline CPI breaching the 2% target for the first time since 2012. While much of the rise in inflation can be attributed to the incredible 9.4% annual rise in the energy component, the fact that we have also seen core inflation jump 0.2% means that many of the underlying components are also being affected. With the ECB set to end their QE programme by the end of the year, markets will be keen to see Draghi's response should inflation continue to push higher.

10.37am BST

Surprised not a bigger bump in qoq growth given the shabby weather-induced Q1. As if the region's politicians did not already know it...a big work-in-progress! https://t.co/Ayw6tTG2Vf

10.37am BST

The weaker than expected eurozone growth figures mean the European Central Bank is unlikely to raise rates before next autumn, says ING Bank senior economist Bert Colijn:

The Eurozone economy grew by just 0.3% QoQ in the second quarter with inflation increasing to above 2%. Any "behind the curve" thoughts that may have surfaced earlier this year can be parked.

Whereas the decline in growth in Q1 was considered to be due to one-offs, it seems like excuses are running out to explain the even weaker Q2 reading. Perhaps still temporary, but factors with a longer shelf life seem to have brought Eurozone GDP growth down to a lower cruising speed for the moment. The confidence impact of a trade row and weaker real household income growth seem to be spoiling the European party for the moment.

10.32am BST

Royal Bank of Scotland has welcomed (unsurprisingly) the FCA statement. Chairman Howard Davies said:

The Board welcomes the FCA's confirmation that it has concluded its investigation into the bank and that no further action will be taken. We await the publication of the FCA's full account and will reflect carefully on its findings to learn any further lessons from what was a hugely challenging time for the bank, its customers and the wider economy.

The Board continues to focus on putting things right for customers through our complaints process and ensuring that past mistakes cannot be repeated. The way the bank deals with business customers in financial difficulty is fundamentally different now.

Related: MPs publish full unredacted report into RBS small business scandal

10.13am BST

Elsewhere, the Financial Conduct Authority has said it can take no action to discipline Royal Bank of Scotland management over the mistreatment of small and medium sized businesses through its Global Restructuring Group subsidiary. Andrew Bailey, FCA chief executive said:

Given the serious concerns that were identified in the independent review it was only right that we launched a comprehensive and forensic investigation to see if there was any action that could be taken against senior management or RBS. It is important to recognise that the business of GRG was largely unregulated and the FCA's powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited. Taking action was therefore always going to be difficult and challenging but after carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success.

We have consulted with independent, external leading counsel who has confirmed that the FCA's conclusions are correct and reasonable.

10.09am BST

Meanwhile eurozone inflation has come in higher than forecast.

The headline figure rose by 2.1% year on year in July compared to 2% the month before and expectations of an unchanged number.

10.02am BST

Eurozone GDP grew by 2.1% year on year in the second quarter, down from 2.5% and lower than the forecast 2.2%.

On a quarter by quarter basis it grew by 0.3%, compared to expectations of a 0.4% rise.

9.35am BST

Two more big fallers after updates, this time in the mid-cap FTSE 250.

Building materials group Travis Perkins is down nearly 10% after it warned 2018 operating profits would be at the lower end of expectations. The company, which owns the Wickes chain, blamed weak demand in the home DIY market.

9.02am BST

Germany's jobless total fell by 6,000 in July to 2.338m, compared to expectations of a 10,000 decline. The unemployment rate was steady at 5.2%, as forecast.

8.49am BST

Here's our story on the Dixons Carphone data breach:

Dixons Carphone said an investigation into a massive data breach has found personal data belonging to 10 million customers may have been accessed last year, nearly 10 times as many as initially thought.

The electronics retailer had estimated the attack involved unauthorised access to 1.2m personal records, when it first reported the breach in June. It said there was no evidence of any fraud.

Related: Dixon Carphone: 10m customers hit by data breach - investigation

8.22am BST

Some big falls on the FTSE 100 from company's reporting results.

Rentokil Initial is down 4.4% after half year profits dropped 81.5% although last year's figure included a one off 462m profit on the disposal of its workwear business. Revenues fell 4.7%.

Centrica results make for some grim reading again but management does sound a little more confident than the talk of 'material uncertainty' we got at the start of the year...

The UK Consumer division is leaking cash and customers. Although the customer churn has slowed with accounts down just 1%, profits there fell 20%. The cold snap could have been good for Centrica but higher wholesale costs, fewer customer accounts and the prepayment cap all weighed on profits.

8.11am BST

It's a cautious opening for European markets, with a raft of company results, some key economic data ahead and continuing concerns about valuations in the technology sector after major falls for Facebook and Twitter.

The FTSE 100 is up 0.07%, while Germany's Dax edged 0.1% higher but France's Cac fell 0.1% and Italy's FTSE MIB dipped 0.04%.

7.53am BST

The Bank of Japan's actions today continue its dovish tendencies. Viraj Patel, foreign exchange strategist at ING Bank said:

When it comes to the July BoJ meeting, there was more than meets the eye - with the central bank making subtle, yet curious, tweaks to its unconventional policy artillery. But if anyone was in doubt, the super-easy BoJ policy is still very much in place; while officials will allow for greater flexibility in long-term yields, it's important to stress the two-way flexibility here (not just upwards, but also downwards). In fact, by firmly restating the annual 80trn JGB purchase target, the BoJ are showing no real appetite for a rapid rise in long-term yields (there was explicit aversion to this in the statement). What sealed the dovish deal was the guidance that the BoJ will 'maintain very low rate levels for an extended period of time' - which is not too dissimilar to what the ECB stated last month.

7.49am BST

Back in the UK, and Dixons Carphone had previously announced it had found unauthorised access to some of its data. Now it says that around 10m records containing personal data may have been affected in 2017.

It says there is evidence some of this data may have left its systems but it maintains these records did not contain payment card or bank account details and there is no evidence of any fraud being committed. It is now contacting all of its customers to apologise and advise them of the steps they need to take to minimise the risk of fraud.

7.45am BST

German consumers are spending freely according to the latest retail sales figures.

They rose 3% year on year in June, up from a 1.2% rise in May and much better than the 1.5% increase expected by analysts. The month on month figure showed a 1.2% increase, compared to a 1.5% decline in May.

7.37am BST

Here are the opening calls for the European markets from IG:

European Opening Calls:#FTSE 7698 -0.04%#DAX 12806 +0.06%#CAC 5484 -0.14%#MIB 21941 +0.00%#IBEX 9849 -0.05%

7.34am BST

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

Investors will be anticipating another nervy day on the markets after a weak start to the week. The technology drop which followed last week's poor results from Facebook and Twitter continued on Monday, with the Nasdaq Composite recording its third decline of more than 1% in a row. Will Apple, which reports later, be able to turn the tide? Michael Hewson, chief market analyst at CMC Markets UK, said:

Apple shares managed to outperform [on Monday], only declining 0.5%, but only because investors are looking ahead to tonight's Q3 earnings announcement, but even here there may be cause for concern. Lower average selling prices at its Q2 update suggested that buyers were opting for cheaper models, perhaps indicating that iPhone X sales may have peaked. Whether this is true or not is likely to be difficult to determine given that Q3 tends to be a weak quarter in any case, as it tends to be a precursor to a range of new product launches or updates, which tend to happen in Q4.

Of more importance will be its burgeoning services business, which includes music, games, apps and Apple pay fees, and which has slowly grown in importance, and has seen revenues rise consistently since 2012.

Last week the European Central Bank signed off for its summer break by playing down expectations that we'd see a rate rise much before the end of Q3 next year, and this candour from President Mario Draghi went some way to help push the euro down towards the bottom end of its recent range.

Since then we've seen it start to edge back up again despite a strong US Q2 GDP number, which has seen US rates edge back up again, and today's latest preliminary flash EU CPI number for July could well prompt a further recovery towards the 1.1800 area. Inflation pressures have popped higher in recent months, helped by rising energy prices, however these do appear to have stalled a little, particularly given that core prices dropped below 1% in June to 0.9%.