UK falls to bottom of G7 growth league – business live
Rolling coverage of the latest economic and financial news, as Britain posts the weakest GDP figures for the second quarter of 2019
Earlier:
5.16pm BST
And finally, Britain's stock market has just posted its worth month in almost a year.
The FTSE 100 has closed 22 points higher at 7207. That means the blue-chip index has lost 5% in August, following heavy losses earlier in the month.
4.43pm BST
Newsflash: The euro has just hit its lowest level in over two years.
The single currency has dropped through $1.1 against the US dollar for the first time since May 2017.
The Euro is dropping against the Dollar "like crazy," giving them a big export and manufacturing advantage...and the Fed does NOTHING! Our Dollar is now the strongest in history. Sounds good, doesn't it? Except to those (manufacturers) that make product for sale outside the U.S.
4.37pm BST
I just spoke with Ruth Gregory, senior UK economist at Capital Economics, about the second-quarter growth figures.
She points out that the UK economy was hit by certain one-off factors in the second quarter of 2019. For example:
3.06pm BST
Although Canada's economy beat forecasts in the last quarter, some analysts are concerned that domestic demand weakened (although the surge in exports made up for it).
Don't let #Canada's strong #GDP numbers fool you! Domestic Demand continues to fall! @MaximeBernier #economy #recession pic.twitter.com/7U4xSy8hPD
Fastest pace of GDP growth in #Canada since Q2 17
However, the details of the GDP report aren't as impressive. Consumption pretty much flat & biz investment shrinking$CAD pic.twitter.com/r96XnQveOo
2.45pm BST
The New York stock market has opened higher, following Europe's lead.
The Dow Jones industrial average has gained 114 points, or 0.4%, on optimism that the US and China might make some progress in their ongoing trade dispute.
2.30pm BST
Britain's growth rate looks less disastrous if you take a longer-term view, though.
The UK economy grew by 1.2% in Q2 2019 compared to a year earlier, the ONS reported earlier this month.
When you look in annual terms, UK GDP growth isn't at the very bottom of the developed world league table, but it is comfortably in the bottom half pic.twitter.com/7nXTuBZcS7
2.05pm BST
We now know for sure that Britain was the weakest-performing major advanced economy in the second quarter of 2019.
Canada's GDP report completes the set of growth figures from the members of the G7, leaving the UK as the worst performer.
1.40pm BST
Newsflash: Canada's economy grew by 0.9% in the second quarter of the year, stronger than expected.
Exports of goods rose 3.7% in the second quarter, following declines in previous two quarters. The increase was led by energy products, which grew 5.9% after a 3.0% decline in the first quarter.
Exports of services rose 1.1%, maintaining the pace of the previous quarter. Import volumes declined 1.0%.
1.22pm BST
President Donald Trump has started the day with a blast at General Motors for cutting its US workforce and moving operations to China.
General Motors, which was once the Giant of Detroit, is now one of the smallest auto manufacturers there. They moved major plants to China, BEFORE I CAME INTO OFFICE. This was done despite the saving help given them by the USA. Now they should start moving back to America again?
GM is now Detroit's smallest auto-making employer https://t.co/pLOZFVsxju by @DavidWelchBN pic.twitter.com/Vfnxg8P4Nv
12.55pm BST
The slowdown in consumer credit growth reported this morning comes as regulators clamp down on the sector.
Yesterday, Amigo Loans warned that it didn't expect to grow its lending books this year, sending its shares sliding by over 50%.
Related: Shares in lender Amigo plunge as regulatory crackdown looms
12.14pm BST
Good news for Tesla! The electric self-driving car maker is being given an exemption from China's auto purchase tax, according to reports.
That tax is currently 10%, so this could helpTesla break into the Chinese car marker.
Tesla popping on news it is to be exempt from China's Auto Purchase Tax$TSLA 227.87 +2.76%
IG's US Fang also going higher.#FANG 2572 +1.03%
11.36am BST
Over in the eurozone, inflation remained stuck at its lowest level since 2016 this month, intensifying pressure on the European Central Bank to launch new stimulus measures.
Consumer prices only rose by 1% in August, Eurostat reports, matching July's three-year low.
Even a sustained period of negative real interest rates has failed to drag inflation above 1%, the lowest level since 2016. With Germany on the brink of recession, the question on everyone's mind is whether the country will drop its adherence to Swartz Null, a balanced budget, and use Government spending, fiscal policy to support growth and hence ultimately higher inflation.
As the UK's political turmoil and the US/ China trade wars continue to loom over the global economy, Germany will have to embrace others tools of growth to support what Draghi is doing on the monetary side."
10.35am BST
Michael Biemann, CEO of the digital property lender, Selina Finance, reckons some people have been racing to complete home purchases before a disorderly Brexit ruins their plans.
Here's his take on today's mortgage approvals data:
"Mortgage approvals for house purchase hit a two-year high in July, suggesting that our looming departure from the EU is causing people to act rather than sit on their hands.
Nobody knows quite what will happen if we leave the EU at the end of October and so people are taking action now, while they are still in control.
10.33am BST
Most of the UK's housing surveys have showed a slowdown in price growth recently - although the Halifax has been an outlier.
Nationwide UK average house prices up 0.6%y/y in August. Prices on the main indices are still in the 0%y/y-1.5%y/y range. Still in "bumping along" territory (I feel like I've been saying that for a while now). Still waiting on Halifax to publicly release its updated measure. pic.twitter.com/KqY5JtLIWK
10.03am BST
The Bank of England also reported that lending to businesses fell by 4.2bn in July, the biggest decline since August 2017.
That's partly because businesses made a net repayment 2bn to their banks during the month.
9.58am BST
This is interesting too:
Interesting to note that since the last Bank Rate increase average quoted rates on new 2-year fixed rate mortgages across all deposit sizes have been drifting down. Previously rates on larger deposit mortgages had been moving in line with the Bank Rate rises. pic.twitter.com/zbxbG5dxlP
9.48am BST
Newsflash: The number of mortgages approved in the UK has hit a two-year high.
Bank of England data just released show that UK lenders approved 67,306 mortgages in July, up from 66,506 in June.
#UnitedKingdom Mortgage Approvals at 67.31K https://t.co/xjNGJUUXea pic.twitter.com/sFGacynvI8
Uptick in UK mortgage approvals for house purchase in July to 67k (c. 3%y/y rise). Still pretty comparable to the post 2016 average & consistent with the general "bumping along" picture painted by house price changes. pic.twitter.com/X6iuILnr4F
9.13am BST
The conciliatory noises from Beijing and Washington in recent days has helped push European stock markets higher, in the final session of the week.
In London the FTSE 100 is up around 0.35%, or 27 points, at 7210 - its highest level in over a week.
8.52am BST
Kevin Roberts, director of Legal & General Mortgage Club, says the UK housing market's biggest problem is there aren't enough homes.
"There has been a great deal of innovation from mortgage lenders which has helped more first-time buyers to step onto the housing ladder.
However, consumers still face challenges when it comes to buying a home. For some it's the struggle of pulling together a big enough deposit, for others it's about finding the right type of housing such as later life accommodation.
8.40am BST
In another blow, Lloyds Bank has reported that companies are getting gloomier.
Its Business Barometer has fallen to just 1% for August, from 13% in July, its lowest level since December 2011.
We have seen a dip in overall business confidence this month, with firms appearing less positive about their own trading prospects and the broader economy
Surveys suggest UK economy is flagging.
Lloyds Bank Business Barometer weakest since late 2011 - unfortunately corroborates the weak European Commission data from yesterday. https://t.co/AjbQKoPPF4 pic.twitter.com/HsGloSzFsg
8.28am BST
Overnight, a closely watched consumer confidence survey has shown that Britons are becoming more anxious.
GfK's consumer confidence index fell to -14 for August, down from -11 in July. That's the weakest since January.
"Until Brexit leaves the front pages - whenever that will be - consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation.
8.19am BST
#Nationwide report #UK #house prices only flat month-on-month in August despite some recent pick-up in #mortgage activity reported by #UKFinance. Year-on-year increase in house prices rose to 0.6% in August from 6-month low of 0.3% in July as prices had fallen 0.3% in Aug 2018
8.13am BST
Marc von Grundherr, director of London estate agents Benham and Reeves, is impressed that house prices have risen at all in the last year [by 0.6%].
He hopes that the market will pick up once Brexit has been resolved....
"While the UK property market may have ground to a halt on a month on month basis, it is an admirable show of defiance to at least register some annual growth, given the seasonalities at play and the addition of political turbulence that continues to plague home seller sentiment.
With Boris lose at the wheel we could well see price growth continue to stall as many brace for what looks like an interesting few months. However, once the dust settles the likelihood is a consistent and strong uplift in property prices, if not this year, then over the next.
8.07am BST
Jonathan Hopper, managing director of Garrington Property Finders, says the UK housing market is becoming more polarised -- with the South suffering the brunt of Brexit uncertainty:
"As the Brexit drama turns up the volume to 11, Britain's economic and political angst will drown out the rest of the news agenda, leaving the property market to hunker down and ride it out.
"Buyers are increasingly splitting into two camps - with one seeing the current market as a threat, while the other views it as an opportunity.
7.59am BST
These charts, from Nationwide's house price report, also show how the market has cooled:
7.46am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
"Annual house price growth remained below 1% for the ninth month in a row in August, at 0.6%. While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.
"Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.
Related: Brexit is damaging business confidence, say leading UK firms
"Let's see what the end product is; that's what you have to judge it by."
European Opening Calls:#FTSE 7195 +0.15%#DAX 11870 +0.27%#CAC 5458 +0.14%#MIB 21434 +0.17%#IBEX 8808 +0.16%#STOXX 3419 +0.23%
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