Markets digest Fed rate hike as Argentina gets $57bn IMF bailout - as it happened

Investors take stock after mixed messages from the US Federal Reserve, as Argentina secures the biggest ever loan in the history of the International Monetary Fund

• Euro hit by concerns over Italian budget
• US growth confirmed at 4.2%; jobless claims rise
• UK car production falls 13% in August

2.49pm BST

Sentiment among European investors has improved, with most major markets reversing earlier losses and following Wall Street higher.

The FTSE 100 is up 0.3% or 20 points at 7,531. In Italy, the FTSE MIB is still down 0.8% on those budget concerns, but losses have been trimmed.

2.33pm BST

The opening bell has rung and US markets have opened higher, helped by the Fed's confidence in the strength of the economy:

2.29pm BST

Sainsbury's and Asda could be made to offload hundreds of stores if they are to win approval for their planned merger from the UK competition watchdog.

Related: Sainsbury's and Asda could close 400 stores to complete merger

2.14pm BST

Anthony Kurukgy, a trader at currency firm Foenix Partners, says the US GDP figures show the Fed's Jerome Powell was justified in his positive view of the economy:

Today's US GDP print remaining at 4.2% reaffirms the Federal Reserve's bullish assessment of its economy in the latest FOMC meeting.

Having raised short term interest rates for the third time in 2018 this week, the Fed remain on course for further monetary tightening before the year is out, with the futures market heavily speculating a December rate increase.

2.07pm BST

The number of Americans filing new claims for unemployment benefits rose more than expected last week, at a time when some workers were likely to have been displaced by Hurricane Florence.

Initial jobless claims rose by 12,000 in the week ending 22 September, to 214,000. The Labor Department also revised up the figure for the week before, by 1,000 to 202,000.

1.46pm BST

The US economy grew at an annualised rate of 4.2% in the second quarter, data just out confirmed.

It was the Commerce Department's third estimate, unchanged from the second quarter. It was the fastest rate of growth since the third quarter of 2014, and up from 2.2% in the first quarter.

US second-quarter GDP growth unrevised at 4.2% https://t.co/7EaQahUINC via @Reuters pic.twitter.com/dsrne0i1s8

12.41pm BST

The FTSE 100 is up 0.3% or 22 points, bucking the trend across Europe where the main markets are down.

The UK's leading index is being boosted by a weaker pound, which is struggling against the dollar after last night's US rate hike by the Federal Reserve.

12.00pm BST

The US investment bank Goldman Sachs is targeting Britain's savers with a new account that pays out 1.5% in annual interest.

Over the last decade savers have been on the wrong end of low interest rates.

We've spoken in depth to people across the country and there is a real disillusionment about savings - while most UK adults are diligently trying to save every month, some do not even have a savings account, with low interest rates and complexity being put to blame.

Related: Wall Street v high street: Goldman Sachs launches 1.5% online saver

11.25am BST

Over in Rome, Guardian correspondent Angela Giuffrida reports on the latest developments on budget talks:

Tensions are rife in Italy as reports emerged that the presentation of the populist coalition government's budget targets for 2019 could be delayed. By law, the targets must be presented by midnight.

11.08am BST

US futures are roughly flat ahead of the bell on Wall Street, as the Federal Reserve avoided rocking the boat on Thursday when it announced a 0.25 point rise in interest rates to 2.25%.

Not everybody was pleased with the decision, however, including Donald Trump who has said before he does not approve of the Fed's rate hikes.

Unfortunately they just raised interest rates a little bit because we are doing so well. I'm not happy about that.

I'd rather pay down debt or do other things, create more jobs.

10.31am BST

Optimism about prospects for the eurozone economy fell among industry and consumers for the ninth month in a row in September, according to a regular survey by the European Commission.

Consistent with the message from the hard data and the PMI surveys, the EC survey showed that the slowdown has been driven by the industrial sector, presumably reflecting the impact of a stronger currency and weaker growth in the currency union's major trading partners.

Today's data are not weak enough to deter the European Central Bank from ending its asset purchases this year. But they support the Bank's cautious approach to interest rate hikes.

10.01am BST

Brent crude oil prices are hovering just below the $82 barrel mark this morning, up 0.8% at $81.98, just off the near four-year highs achieved on Tuesday.

Prices are rising over fears of a supply shortage as Washington' prepares to reimpose sanctions on Iran from 4 November.

9.42am BST

The number of calls rolling of UK production lines fell for the third month in a row, according to figures from the Society of Motor Manufacturers and Traders.

The quieter summer months are often subject to fluctuations due to the variable timing and duration of annual maintenance and re-tooling shutdowns. This instability was exacerbated in August, with the industry racing to re-certify entire model ranges to meet tougher testing standards in force on September 1.

With exports, the majority to the EU, continuing to drive demand, it underscores the importance of a Brexit agreement to safeguard this trade; for our sector, 'no deal' is not an option.

9.04am BST

The euro is down 0.3% at $1.1703, with traders unsettled by reports of a row in Italy's new government, ahead of a deadline to present its first budget.

Earlier it hit a one-week low of $1.1690 following a report in Italian newspaper, the Corriere della Sera that this afternoon's budget meeting was likely to be delayed.

8.39am BST

Europe's main markets have opened down, following in the wake of losses on Wall Street last night.

Italy's FTSE MIB is down 1.8% as investor nerves rise about how budget talks will play out as the deadline looms.

8.27am BST

Argentina was offered respite overnight after securing a $57bn loan from the International Monetary Fund.

Argentina has developed a strengthened economic plan that is aimed at bolstering confidence and stabilising the economy. At the core of the new plan is a fiscal policy aimed at strengthening its fiscal position and having a sustainable, appropriately financed budget, a strong monetary policy focused on reducing inflation, a floating exchange rate policy without intervention.

A central element of the authorities' plan will be to reach budgetary balance by 2019, one year earlier than previously intended, and to move to a 1% primary surplus in 2020. These decisive steps will reduce the government's financing needs and bring down public debt. Congressional approval of the 2019 budget will be an essential next step.

Related: Argentina gets biggest loan in IMF's history at $57bn

7.59am BST

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

Wall Street closed lower last night after the Federal Reserve delivered the widely expected 0.25 point rise in interest rates, to 2.25%.

European Opening Calls:#FTSE 7495 -0.22%#DAX 12333 -0.42%#CAC 5502 -0.19%#MIB 21521 -0.58%#IBEX 9496 -0.31%

Fed chair Jay Powell's comments that there was no evidence whatsoever of inflationary pressure knocked US yields which had been climbing in the lead up to this week's meeting, down quite sharply, and also saw both the S&P500 and Dow finish the day lower.

That, combined with a slight nudge higher in the unemployment forecast gave the impression that US policymakers were slightly less optimistic about the long term future outlook than they were a few weeks ago, and this saw US yields slip back, as investors indulged in a spot of profit taking.