Pound dips as Brexit deal hopes fade - as it happened

Pound falls against the dollar and the euro after EU official says there will be 'no deal in the desert' at a summit in Egypt next week

• High street sales flat in February, CBI says
• German economy flatlines in fourth quarter
• Canada's Saputo to buy Dairy Crest for nearly 1bn
• Eurozone inflation dips to 1.4% in January

3.12pm GMT

Time for a summary before we close up for the day:

2.37pm GMT

The opening bell has rung and here is how it's looking:

1.29pm GMT

Unite, the union, says it is seeking an urgent meeting with Saputo, the Canadian dairy giant which is hoping to buy Britain's Dairy Crest for almost 1bn.

Unite represents workers across Dairy Crest's UK operations, with the biggest concentration of members at the Davidstow cheese plant in Cornwall.

Unite is cautiously optimistic that Saputo is seeking to develop Dairy Crest's operation in the UK over the long-term.

Unite is now seeking an urgent meeting with the senior management at Saputo to receive detailed information about the company's plans and secure assurances about employment levels and a commitment to maintaining existing plants.

12.26pm GMT

The pound has just dipped below $1.30, down 0.4% against the dollar at $1.2997.

It is down 0.3% against the euro at a1.1469.

12.20pm GMT

European markets are up across the board, with US futures pointing to a higher open for Wall Street.

Connor Campbell, analyst at the spread betting firm Spreadex, gives his take:

The markets perked up as Friday went on, hopeful that a meeting between Donald Trump and China's Vice Premier Liu He will yield some kind of trade war solution.

Once again crossing 7200, the FTSE climbed more than half a percent, aided in part by a slight dip from sterling. Cold water has been poured on the hopes of Theresa May reaching a new Brexit agreement at this Sunday's summit in Egypt, dragging the pound down 0.2% against both the euro and the dollar.

11.59am GMT

More on inflation now, with the price of a first class stamp to rise 3p to 70p from 25 March. The price of a second class stamp will also increase by 3p, to 61p.

Buy now!

Royal Mail to increase price of first-class stamp by 3p to 70p https://t.co/RkriDf58ql

11.26am GMT

It's been a slow start to the year for Britain's retailers, according to the latest survey from the CBI.

Retail sales were flat in February, following zero growth in January, the lobby group said in its latest distributive trades survey of 100 firms.

The high street has seen a slow start to the year, with year-on-year sales volumes unchanged again this month. Although real earnings growth is higher, consumer confidence has been ebbing away, keeping a lid on demand.

Retail investment plans have taken a hit this quarter, falling to their weakest since 2012. Until politicians can agree a deal that commands a majority in parliament, is acceptable to the EU and protects our economy, business despair will deepen. A deal must be negotiated, and no-deal averted.

UK #retail sales volumes were once again flat in the year to February, enough to push the rolling quarterly average to its lowest since September 2016 #DTS https://t.co/PTDhwu8ErG pic.twitter.com/6zassLU1Fv

10.44am GMT

The pound is under some pressure this morning after EU sources poured cold water on the idea that Brexit progress would be made at a meeting in Egypt next week.

Reuters is reporting than an unnamed official in Brussels said EU leaders would not clinch a deal with Theresa May during an EU summit with the League of Arab States in Sharm el-Sheikh, scheduled for Sunday and Monday.

10.26am GMT

Here is how inflation compares across Europe, with the lowest rate at 0.5% in Greece, and the highest rate at 3.2% in Romania:

10.23am GMT

Inflation in the eurozone slowed slightly in January as energy price growth slowed sharply.

The headline annual rate fell to 1.4% in January, from 1.5% in December. Energy prices were 2.7% higher in the year to January, compared with 5.5% in the year to December.

10.00am GMT

The FTSE 250, which is a more UK-focused index than the FTSE 100, is also up 0.3% this morning, at 19,297.

This morning's takeover targets - Dairy Crest and Provident Financial - are both among the top risers, up 13% and 4% respectively.

9.55am GMT

Investors across Europe are in a fairly upbeat mood this morning, unfazed by weak data from Germany.

The latest scores:

9.38am GMT

And here is a chart tracking the performance of Dairy Crest shares in February:

9.33am GMT

Here is our full story on the Dairy Crest deal:

Related: Canada's Saputo to buy Dairy Crest in near-1bn deal

9.32am GMT

Confidence among German firms fell for the sixth month in February, as business leaders expect only sluggish growth in Europe's largest economy.

The German economy is experiencing a downturn. There was hope that the weak period we experienced in the second half of 2018 was only temporary but it looks like it will continue.

8.58am GMT

More M&A news this morning after subprime lender Provident Financial received a 1.3bn offer from its smaller rival, Non-Standard Finance.

If the all-share reverse takeover goes ahead, John van Kuffeler, the founder and chief executive of NSF, would once again be at the helm of Provident - a firm he ran for 22 years until the end of 2013.

This transaction will create a market leader in the non-standard finance sector with a strong position in all four main segments. We have recognised the strong logic and value creation potential of a combination with Provident for some time and hence approached the Provident Board with a proposal in January last year.

That approach was rebuffed and since then Provident has further lost its way. However, NSF has extensive management expertise and experience, and the correct strategy to turn Provident around and release significant value by combining it with our own fast-growing businesses for the benefit of customers, employees and investors. I'm delighted that holders of over 50 per cent. of Provident's shares have given their support to our proposal today.

8.32am GMT

Some major corporate news this morning as Dairy Crest, the UK cheese and butter manufacturer, announced it is recommending a 975m offer from Canadian dairy conglomerate Saputo.

7.57am GMT

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

Germany's economy came to a standstill in the final quarter of 2018, figures published this morning. Quarterly growth of 0% was confirmed in a second estimate of GDP from the Federal Statistics Office.

The GDP components provide interesting insights: the German economy is in a better shape than its current reputation.

In our view, there are two main takeaways from this morning's data. First, the temporary problems in the car industry mask solid fundamentals across the entire economy and second, the sharp inventory reduction suggests that it will still take some time but eventually the car-related problems should disappear.