Donald Trump launches attack on China over trade 'rip-off' – as it happened

Rolling coverage of business, economics and markets as stock markets and the pound fall

• Sterling slumps further as fears mount over no-deal Brexit
• Chief of British Gas owner Centrica to step down as it posts loss
  
• Mark Carney fails to make shortlist for IMF top job

3.04pm BST

Messrs Trump and Johnson have both moved markets today with their respective central concerns: trade with China and Brexit.

For all the words of warning from politicians, economists and central bankers of the dangers of a no-deal Brexit, the market judgement comes as a brutal reminder that investors are not prepared to take politicians on trust and that the balance of risks is clearly tilted to the downside.

The pound is unlikely to remain at current levels for long: Either the government delivers a no-deal Brexit, in which case sterling might be expected to fall much further, or this prospect is avoided in which case the currency retraces some lost ground.

2.32pm BST

US stock markets have fallen after US President Donald Trump's attacks on China, which analysts have said could scupper trade talks.

The Nasdaq composite index lost 0.68% in early trading, while the S&P 500 lost 0.52% and the Dow Jones industrial average 0.34% at the opening bell.

2.24pm BST

The FTSE 100 is now down by 0.3%, and the pain has increased for Centrica and Fresnillo after their poor results: the former has lost 17% and the latter has lost a fifth.

On the mid-cap FTSE 250 CYBG, the owner of the Virgin Money, Clydesdale and Yorkshire bank brands, is the biggest faller.

2.05pm BST

US stock market futures are pointing to a difficult time for Wall Street today, after Donald Trump's Twitter attacks on China.

Dow Jones industrial average futures prices have fallen by 0.4% with half an hour to go until the opening bell, while futures for the S&P 500 are down by 0.5% and those on the Nasdaq 100 are down by 0.8%.

1.48pm BST

The latest German inflation data might add to the case for the European Central Bank to go ahead with an interest rate cut in September: the harmonised index of consumer prices (used by the ECB) fell to 1.1%, the lowest since November 2016.

In the previous month the inflation measure had reached 1.5%, much closer to the ECB's 2% inflation target.

German CPI - lowest Y/Y since November 2016 at 1.1% https://t.co/hBSU940daq

1.32pm BST

Trump's tweets appear to have scuppered any hopes for progress in the latest talks, barring some major concessions on the Chinese side.

Stephen Innes, managing partner at VM Markets Pte, said:

Whatever shred of optimism markets had about the ongoing trade negotiations were dealt as a severe blow when President Trump flew off the handle again at China for not buying American agricultural products.

Following another month of escalating tensions, agreement on practically anything would have been viewed positively, but I think you can throw that view out the window.

12.55pm BST

European equities have suffered today after poor earnings from big companies, and the slide has accelerated after Trump's trade comments.

Germany's Dax is now down by 2.2% today - and has hit its lowest level in more than a year. France's Cac 40 is down by 1.5%.

12.40pm BST

An update on banking regulation: the Bank of England has today confirmed plans to make big British lenders publish plans to show that they could go bankrupt without needing the government to step in like it did with the 45bn bailout of Royal Bank of Scotland a decade ago.

The UK will become the second country to force its largest lenders to publicly disclose their "living wills" and prove they can afford to foot the bill for their own failures in order to avoid costly taxpayer bailouts, reports the Guardian's Kalyeena Makortoff.

12.30pm BST

The president of the United States is awake, and he appears to be doing his best to prevent any progress in trade talks with China that are taking place in Shanghai.

Donald Trump clearly is not holding out much hope for the latest round - which will not be welcomed by jittery investors hoping for a resolution.

China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don't come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years....

..My team is negotiating with them now, but they always change the deal in the end to their benefit. They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue

...to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it!

Markets could be in for another disappointment because, as of yet, there are no other concrete signs that negotiators are getting closer to a deal. On the contrary, China has demanded that the US lift all tariff hikes before a deal can be cut, which doesn't align well with the American approach to keep the pressure on even after a deal.

12.17pm BST

Markets were yesterday pricing in a 50% chance of a Bank of England interest rate cut before the end of the year, Archer added.

However, a fiscal boost from a free-spending new government could add to pressure not to cut interest rates.

The fact that divisia money is now slowing down rapidly indicates that GDP contraction is almost imminent which, of course, is hitting our currency in addition to the no-deal Brexit talk.

12.10pm BST

There has been something of an about-turn in views on the Bank of England's interest rate path in recent weeks.

Governor Mark Carney and co had been hinting that interest rates could rise in the event of a smooth Brexit - their central assumption. But as government policy has taken on more of a no-deal flavour that is looking increasingly strained.

Until very recently (including the June MPC meeting), the main focus on UK monetary policy was when the Bank of England is most likely to raise interest rates. However, there has been a marked turnaround in sentiment regarding likely Bank of England action and the key question is now whether the central bank's next move will be to raise or cut interest rates.

We suspect that the Bank of England will acknowledge that the risks to the UK economic outlook have increased but play down the prospects of an interest rate cut unless there is a disruptive "no deal" Brexit in October.

11.53am BST

It would probably take conciliatory noises from the government or the EU to push the pound back up, although perhaps don't hold your breath for any change in tone any time soon, given that many key figures on either side will be on holiday in August.

Currency traders are trying to work out what it will take for sterling to fall further, given that markets appear to have finally priced in Boris Johnson's no-deal Brexit threat.

The market finally seems to be waking up to the potential for No Deal Brexit, despite the fact that it has been the legal default for over two years now and consecutive prime ministers have maintained that they would prefer to leave without a deal than with a bad deal. The difference is that, this time, people believe Boris Johnson just might be crazy enough to carry out the threat.

The Bank of England corrected its panic cut post-referendum when they raised rates in 2017 and then took interest rates to the highest since the financial crisis in mid-2018. With this buffer, as well as a seemingly synchronised dovish shift across the major economies, the market is already pricing over 50% likelihood of a reduction in rates later this year.

11.15am BST

The number of insolvent companies in England and Wales hit a five-year high in the second quarter of 2019, in the latest ominous economic signal for the British economy.

There were 4,321 company insolvencies between April and June, 2.6% higher than in the first three months of the year and an increase of 11.9% year-on-year.

Today's figures are evidence of a difficult period for UK businesses. Tighter constraints on consumers and significant uncertainty about the future of the UK economy and the UK's relationship with the EU are just some of the key factors at play that are making the business climate a challenging one.

Questions around what Brexit really means have hit investment and growth levels, and led to a degree of economic stagnation.

11.08am BST

The pound has moderated some of its losses for the day: it has now lost 0.3% for the day to trade at around $1.2184 against the US dollar.

The slight recovery has weighed on the FTSE 100, which is now up by only 0.07%.

Contra the doom-mongering, the pound is still up marginally against the Turkish lira this year. pic.twitter.com/CSTeBHKShm

10.49am BST

Important pensions news from the Financial Conduct Authority.

Britain's financial watchdog has proposed measures to protect consumers transferring out of defined benefit pension schemes, including a ban on contingent charging for advice and a clampdown on ongoing fees over 20 to 30 years - practices it said were costing customers 2bn a year.

Related: FCA plans more consumer protection on pension transfers

10.45am BST

Giffgaff has been fined 1.4m for overcharging 2.6 million mobile phone customers.

An Ofcom investigation revealed the network, which is owned by O2's parent company Telefonica, overcharged users a total of almost 2.9m, writes the Guardian's Mark Sweney.

Related: Giffgaff fined 1.4m for overcharging millions of mobile customers

10.42am BST

Some more interesting detail on the UK from the eurozone economic survey: consumers don't appear to be that bothered by the Brexit chaos.

Here's more from Samuel Tombs, chief UK economist at Pantheon Macroeconomics:

The overall sentiment indicator for consumers jumped to -7 in July - its highest level since August 2018 - from -11 in June. Confidence among households about the economic outlook recovered in July, while households' optimism about the 12-month outlook for their personal finances rose further above its long-run average.

10.30am BST

The weakening in the eurozone is reflected across the world, and it has drawn a response from central bankers who are planning to add support to their ailing economies.

The language now promises further easing if downside risks materialise, mainly regarding developments in overseas economies.

10.15am BST

Eurozone business confidence fell to an almost six-year low in July, according to closely followed indicators published by the European commission.

Business confidence for the eurozone fell "markedly", the commission said, from a reading of 0.17 points in June to a negative reading of 0.12 in July.

10.00am BST

British bakery chain Greggs has reported a 58% rise in profits today, after the buzz around its vegan sausage roll boosted sales.

9.42am BST

There were heavier sterling trading volumes than normal in Asia trading hours, say analysts at Deutsche Bank led by Jim Reid.

The renewed selling this morning has left the pound just a percent away from hitting a 34-year low (if ignoring the "flash crash" of October 2016). They said:

With 93 days until the UK's scheduled departure from the EU on October 31, and with Johnson's policy of leaving that day "no ifs or buts", fears of a no-deal outcome are increasingly being reflected in the currency.

9.27am BST

Remember that Johnson and much of his cabinet have already voted in favour of the withdrawal deal that Theresa May agreed with the EU. But his new-found conversion to leaving without a deal if necessary reflects the apparent impossibility of getting enough votes to pass that deal.

Kit Juckes, chief foreign exchange strategist at Socii(C)ti(C) Gi(C)ni(C)rale, said:

UK PM Boris Johnson's position that there is no point talking about the exit deal with the EU until the Irish border backstop arrangement is removed, reflects his inability to get the deal in its current format through Parliament.

His hard-line stance is seeing the Conservatives win voters back from the Brexit Party, according to recent polls, and he needs either to get a deal from the EU that he can get through Parliament or win back enough Brexiteer votes to be able to win an election. Either way, he is committed to a hard-line stance towards the EU that will of course, be rebuffed aggressively. In the process, sterling moves to the bottom of its post-referendum ranges and re-tests historical trade-weighted lows.

9.18am BST

Oh, to be a fly on the wall in 10 Downing Street today as they discuss a fall in sterling at peak holiday season.

Perhaps, counterintuitively, Boris Johnson and his new strategy supremo, Dominic Cummings, may welcome the fall (or what it represents), says Craig Erlam, senior market analyst at foreign exchange firm Oanda.

The weakness in the pound is a reflection of the fact that Boris Johnson's plan is working. He wants his no-deal threats to be taken seriously by the EU in the hope that it forces them to re-engage on the backstop. Clearly he has traders convinced.

Ultimately, May failed to convince anyone that no-deal was ever an option, despite repeated warnings that it was better than a bad deal. Boris Johnson is determined not to make the same mistake and it now remains to be seen whether the EU will take his threats as seriously as the market is. Traders are currently not optimistic but it's still early days. For now, the currency may remain under severe pressure.

8.58am BST

The FTSE 100 is the one gainer among major European stock markets, still up by 0.14%.

Elsewhere Germany's Dax index has been shaken by poor earnings from the Lufthansa airline and chemicals company Bayer. It fell by 0.5%.

8.49am BST

British Gas owner Centrica's shares are sputtering: they are now at a 21-year low.

8.43am BST

A bit more detail on those BP earnings: profits fell by 35% in the second quarter on the back of sliding crude oil prices.

BP said that its underlying replacement cost profit - a widely-watched measure which strips out exceptional items and changes in the value of oil inventories - was broadly unchanged at $2.8bn. That beat the average analyst forecast of $2.48bn, according to Bloomberg.

8.19am BST

Centrica shares have fallen by 10% in early trading on the FTSE 100.

Here is the chart which probably goes some way to explaining why Centrica boss Ian Conn is being shown the door.

8.07am BST

Back on sterling, it's "relentless selling pressure" says Neil Wilson, chief market analyst at Markets.com.

If sterling weakens further "it's anyone's guess where cable [sterling against the dollar] could land," he said.

Remember the previous post-2016 low was before no-deal was on the table - it was all talk of a hard v soft Brexit - no deal wasn't even being discussed.

The reasons behind the slide are well trodden but worth noting again: increased risk of a no-deal Brexit as the new government regime pivots squarely towards making no-deal a reality.

Terrible timing for the holidays. Why is it always August?

7.59am BST

Ian Conn's departure came after what he described as an "exceptionally challenging environment in the first half of 2019", resulting in Centrica slashing its dividend in half.

7.46am BST

British Gas owner Centrica has announced that its chief executive, Ian Conn, will step down next year.

Conn will remain with Centrica at least until the 2020 annual general meeting and "provide his full support to help with the transition", the company said.

Iain has now agreed with the Board that, while he will continue to focus on driving [the] transformation, including pursuing the announced divestments and continuing to drive performance and efficiency, he will also support an orderly succession before stepping down in due course.

7.35am BST

Here's a graph regular readers will have seen yesterday, but it certainly bears repeating: sterling against the US dollar since the start of 2016, ahead of the June 2016 referendum.

7.24am BST

Boris Johnson's financial markets welcoming party has delivered another blow this morning, sending sterling to fresh lows.

When campaigning for the Conservative leadership, the new prime minister made it very clear that he intended to leave the EU on 31 October with or without a deal. Markets appeared not to believe him; they now appear to have caught up.

We can't accept the backstop, it was thrown out three times, the withdrawal agreement as it stands is dead and everybody gets that. But there is ample scope to do a new deal and a better deal.

On the bright side, the pound sterling is not the worst performing currency in the world today. That accolade goes to the Madagascan Ariary. The pound, on the other hand, is only the second-worst performing currency in the entire world pic.twitter.com/bwJLNID8Ho