China's yuan slides to 11-year low, but pound hits one-month high – business live

Rolling coverage of the latest economic and financial news

• Latest: Pound rises after Brexit meeting
• Introduction: Yuan slides as trade jitters grow
• US and China hiked tariffs on Friday
• UBS tells clients to sell shares
• Germany on brink of recession

5.52pm BST

The pound's strength held the London stock market back today.

The FTSE 100 closed 5 points lower at 7,089, while other European indices posted gains. Germany's DAX rose by 71 points to 11,730, up 0.6%.

2.48pm BST

Fiona Cincotta at City Index agrees that no-deal Brexit fears are easing today, pushing the pound up (a bit).

She writes:

Sterling is advancing across the board as the UK opposition leaders met today to plot to prevent a no deal Brexit.

Whilst Bojo is sticking to his do or die Brexit mantra, he has also expressed a little more optimism that a new deal can still be achieved between the EU and the UK. This comes following last week's visits to Germany and France where Angela Merkel and French President Macron both said they are willing to listen to alternatives the Irish backstop.

2.45pm BST

Merger news: Philip Morris has announced it is talking to fellow tobacco firm Altria over a possible takeover.

It's billed as a 'merger of equals', but the deal has pushed Altria up almost 10% at the open while Philip Morris stock is down about 3%.

"There can be no assurance that any agreement or transaction will result from these discussions."

BREAKING: Philip Morris International says it is in talks with Altria Group regarding a potential all-stock merger. https://t.co/jn8limUSe7

Shares of Altria are jumping 8% in the pre-market; shares of Philip Morris Intl. down 3% pic.twitter.com/W6X5thxase

2.27pm BST

In the currency markets, sterling has gained three-quarters of a cent against the US dollar to $1.23 -- a one-month high.

It's up against the euro too at a1.107, which is also the level since the end of July.

The leaders of the opposition parties held a productive and detailed meeting on stopping a disastrous no-deal exit from the EU.

Jeremy Corbyn outlined the legal advice he has received from shadow attorney general, Shami Chakrabarti, which calls Boris Johnson's plans to suspend parliament to force through a no deal "the gravest abuse of power and attack upon UK constitutional principle in living memory".

Related: Jeremy Corbyn agrees to prioritise legislation to stop no-deal Brexit

Related: Corbyn agrees to work with opposition parties to stop no-deal Brexit by legislation - live updates

1.47pm BST

Hopes of a trade war breakthrough have pushed the oil price up too, with Brent crude gaining 0.6% to $59 per barrel.

"At the start of this week, investor sentiment turned around completely on reports that US-China trade talks are to be restarted and that there might be a US-Iran Summit - though this seems contingent on dropping sanctions.

But beware! Sentiment can clearly change on a tweet. If investors believe that the US-China trade dispute is part of a longer-term hegemonic battle between the US and China, then they likely assume the trade dispute will carry on for much longer without a satisfactory resolution."

1.36pm BST

Shares in European carmakers are rising, following China's proposal to relax restrictions on car sales.

Volkswagen shares have gained 1.6%, and Daimler are up 1.3%, helping to left Germany's DAX higher.

1.15pm BST

In an interesting twist, Beijing has announced it is considering measures designed to stimulate its economy, and counter the damage caused by the trade war.

Beijing's State Council has identified 20 measures to support consumption, including removing the restrictions on auto sales that are imposed by some local governments.

#China #Auto | More details from Bloomberg translation: pic.twitter.com/kWlDKcSjWe

11.51am BST

Economists don't see much cheer in today's updated German GDP report:

The German economy contracted in Q2 on drag from the external sector#Brexit is one of the main reasons, as exports to the UK dropped sharply in Q2 after UK companies finished stockpiling & Brexit was extended pic.twitter.com/Zd6jfrL2O3

A collapse in exports pushed #Germany's economy to the brink of recession in Q2. The detailed figures of the statisticians reveal the weak situation of Germany. The investments shrink, the profits of the comps plummet. https://t.co/GxKpr8JFHc pic.twitter.com/izlLoVRkSG

11.33am BST

Italy's Democratic Party have confirmed that coalition talks with M5S have hit a roadblock, but they're not taking the blame.

They say it's M5S's fault, for insisting that their leader, Luigi Di Maio, should become interior minister as well as deputy PM. M5S have denied it, though.

10.20am BST

Over in Italy, talks to form a new coalition government are on hold.

The anti-establishment 5-Star Movement has suspended negotiations with the centre-left Democratic Party (DP), until they agree to the reappointment of Giuseppe Conte as prime minister.

"We cannot any longer work like this. Either the attitude changes or it's difficult. We will see the PD again when the party has given its OK to the reappointment of Conte."

The negotiation on a new government between center-left PD and 5 Star Movement that yesterday seemed at hand is now stuck: the two parties cannot agree on who is going to be the next Prime Minister. They still have 24 hours to sort out their differences

The reason is that the president of the Republic gave the parties untill Wednsday to find a solution to the crisis. If there is no agreement before tomorrow evening the president is going to dissolve the parliament and call for snap election

9.38am BST

The trade war has certainly left its mark on Germany's economy.

Related: Germany on brink of recession as business confidence nosedives

9.18am BST

China's central bank is doing its best to prop up the yuan, as it sinks to fresh 11-year lows today.

China fixed the daily midpoint rate for the yuan at levels not seen for more than a decade on Tuesday as Beijing remains locked in a protracted trade war with Washington.

The People's Bank of China set the midpoint at 7.0810 per dollar - weaker than the previous day's fix, but stronger than the 7.1055 level the market was expecting, according to a Reuters estimate.

USD/CNY (CN) CHINA PBOC SETS YUAN REFERENCE RATE: 7.0810 V 7.0570 PRIOR (weakest level since March 18, 2008) risk markets should like this no idea why #gold moved higher #USDCNH #YUAN #FOREX pic.twitter.com/1Htw7C8Bq6

8.56am BST

Britain's stock market has fallen in early trading, as investors fret about the trade war.

The FTSE 100 has lost 32 points, or 0.46%, to 7062 points. Healthcare stocks, consumer cyclicals and industrial firms are among the fallers.

8.38am BST

Now this is awkward.

Beijing is refusing to confirm Donald Trump's claim that Chinese officials called "twice" over the weekend to discuss trade talks with his administration.

China's Foreign Ministry says they have not heard of telephone call between the US and China on trade

8.19am BST

Swiss bank UBS is so concerned about the trade war that it is recommending that its clients sell shares.

UBS has cut its recommendation on equities to "underweight", for the first time since the eurozone crisis in 2012.

The trade dispute escalated this weekend, with the US president saying the conflict was "in many ways"an emergency." Late last week, the US and China both announced a fresh increase in tariffs on each other's goods, including an increase to 30% from 25% on $250bn of US imports of Chinese products.

We still believe the US can avoid recession in 2020, helped by easing from the Federal Reserve and healthy consumer spending. But downside risks are increasing for both the global economy and markets. With talks between the US and China dominating market moves over the near term, investors should brace for higher volatility.

7.59am BST

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

#China Yuan keeps falling as traders temper optimism over U.S.-China trade deal. pic.twitter.com/rzSwgNFU56

"I have great respect for the fact that China called, they want to make a deal.

"This is the first time I've seen them where they really do want to make a deal, and I think that's a very positive step.

Here's how wildly stocks swing when Trump mentions the trade war https://t.co/qN8bxKRQlc pic.twitter.com/QNz7wtGv2P

Related: China's yuan hits 11-year low as trade tensions grip markets