Bank of England policymaker warns of 'pandemic hangovers', as private sector shrinks – as it happened

Graeme Wearden

from on 2020-11-23 22:50 (#5AQS3)

Rolling coverage of the latest economic and financial news, as the UK Treasury Committee questions the Bank of England

Earlier:

7.04pm GMT

Time to wrap up.

MPs have heard that the UK economy risks a pandemic hangover', even once Covid-19 vaccines are deployed.

Obviously it's better to have a vaccine than not, but those are hangovers from the pandemic even as and when there is an effective vaccine, which I suspect will weigh on the economy for some time.

Speaking personally, it felt like the first time in eight or nine months that there is some lights coming at the end of the tunnel.

I have to say I think it's terrific news, and I take my hat off to all the people involved in doing this work on these vaccines.

6.28pm GMT

Speaking of the furlough scheme....chancellor Rishi Sunak has been criticised by the Treasury committee for not helping thousands of small businesses in England on the brink of collapse.

These firms, the MPs warn, would have benefited from financial help in Scotland, Wales and Northern Ireland, but are falling through the gaps in Sunak's plans.

6.25pm GMT

The Bank of England also told the Treasury Committee that it is investigating how its decision to expand its QE programme by 150bn was reported hours earlier by The Sun newspaper.

Mike Hill MP asked governor Andrew Bailey if he agrees that this alleged leak" is the Bank's worst leak in almost a quarter of a century of monetary policy independence, as Bloomberg described it.

It is a very serious issue... and we have an investigation going on, to seek to get to the bottom of what happened.

What we have to assume is that it was a leak and we therefore have to try to get to the bottom of it."

.@MikeHillMP asks about this article that called the Bank of England's 150bn increase in QE appearing in The Sun before it was announced their "worst leak in almost a quarter of a century".https://t.co/8AQYKMthCB

Andrew Bailey tells us that there is an investigation going on.

6.09pm GMT

Bank of England Chief Economist Andy Haldane tells us that business investment is the "single missing ingredient" of the #coronavirus recovery so far. pic.twitter.com/Op6WBzh71s

6.04pm GMT

Back at the Treasury Committee, the Bank of England has poured plenty of cold water on Modern Monetary Theory.

Steve Baker MP raises the issue by pointing out that the Bank is on the way to conducting 875bn of quantitative easing (expanding its balance sheet to buy UK government bonds).

One, it's not modern, two it's not monetary, and three it's not really theory.

We've seen that trick repeated many times through history and it typically hasn't ended very well.

One to kick up a big fight on Twitter... Bank of England leaders pour quite a lot of cold water on Modern Monetary Theory. Andy Haldane says MMT "isn't modern, isn't monetary and isn't a theory".

Andy Haldane zinger on Modern Monetary Theory: I have three problems with MMT: It's not modern. It's not monetary and it's not really theory."

5.29pm GMT

The early rally in European stock markets also faded, with the French CAC and German DAX both ending slightly lower.

The previous two Mondays have seen stock markets surge higher, but AstraZeneca hasn't matched Pfizer or Moderna on that score.

The AstraZeneca/Oxford vaccine update failed to recreate the kinds of gains produced by the Pfizer and Moderna preparations.

Though up to 90% effective dependent on how it is administered, the main takeaway for investors was the headline that, on average, the vaccine has an efficacy rate of 70.4%.

5.25pm GMT

Back in the City, the FTSE 100 has closed in the red, down 17 points or 0.3% at 6333 points.

Travel companies, oil firms and banks led the risers, with jet engine maker Rolls-Royce jumping 7.6% and airline group IAG up 5.4%. Hotel operator Whitbread gained 2.6%, while the pick-up in the oil price today lifted Royal Dutch Shell by over 4%.

The FTSE 100 is underperforming versus its continental counterparts as the firmer pound has dented the market. In terms of index points, the biggest fallers on the FTSE are AstraZeneca, GlaxoSmithKline, British American Tobacco, Diageo, and Unilever - all of which earn a large portion of their total revenue from overseas, so the upward move in the pound has held back the stocks.

The FTSE 250 and eurozone equity markets have been lifted by the news that the possible Covid-19 vaccine being developed by AstraZeneca and Oxford University is 70% effective. On the face of it, the drugs from Pfizer-BioNTech and Moderna are far more effective, but that 70% reading is an average. One of the regimens was 90% effective and the other was 62% effective. Also, because it can be stored at -3 degrees, so it is far more practical from a transportation and production point of view.

5.03pm GMT

Fellow MPC member Silvana Tenreyro adds that policymakers can reduce the scarring effects of the pandemic which Michael Saunders is worried about.

And with confidence in a vaccine, policymakers can act more forcefully', she adds.

The scarring effects are not written on stone. They can be affected by policy, and we should be acting to avoid them.

Most of the businesses who were viable before [the pandemic] should be viable post vaccine.

4.56pm GMT

Bank of England policymaker Michael Saunders has warned MPs that the UK economy risks scarring effects from the pandemic.

Saunders tells the Treasury committee that he is worried about hangovers" from the pandemic, even if and when an effective vaccine is widely rolled out. He cites several areas of concern:

Obviously it's better to have a vaccine than not, but those are hangovers from the pandemic even as and when there is an effective vaccine, which I suspect will weigh on the economy for some time.

4.40pm GMT

Q: Which companies are least prepared for the end of the Brexit transition?

Governor Andrew Bailey says that large firms feel more confident than smaller companies.

It is in the best interest of both sides, the UK and EU, for there to be a trade agreement, with a strong element of goodwill around it around how it is implemented.

The governor of the Bank of England, Andrew Bailey, says no-deal Brexit would have a bigger long-term impact on the British economy than Covid-19.

Speaking at the Treasury select committee, Bailey says Covid is having a much bigger short-term impact, but "it would be better to have a trade deal, no question"

"The long term effects, I think, would be larger than the long-term effects of Covid."

Bank of England Governor Andrew Bailey tells us that the long-term scarring effects of a no-deal #Brexit are likely to be larger than those from the #coronavirus crisis. pic.twitter.com/cMzcSePDbN

4.21pm GMT

Q: Is there a danger that positive vaccine news will create complacency, and lead to a third wave of Covid infections in the first or second quarter of next year?

Haldane says there is a possibility of that risk coming to pass.

If anything, people were a little too fearful of the future, and that uncertainty was having quite a significant dampening and damaging effect on their willingness to spend, and to get out and about.

4.13pm GMT

Q: Is the progress towards vaccines that are going to be distributed and hopefully work broadly in line with your forecasts, or are you bouncier now that we have data from the likes of AstraZeneca?

Bouncy is pushing it, Haldane replies. But yes, the latest news is to the positive side of the Bank's forecasts, for a gradual phasing in of improved treatments from the middle of next year.

I'd say on balance that news has been to the positive side of our assumptions in November,"

It's excellent news. Speaking personally, it felt like the first time in eight or nine months that there is some lights coming at the end of the tunnel.

I have to say I think it's terrific news, and I take my hat off to all the people involved in doing this work on these vaccines.

3.57pm GMT

Over in parliament, the Treasury committee is holding a session with senior Bank of England officials.

They're hearing from governor Andrew Bailey, chief economist Andy Haldane, and external members of the Monetary Policy Committee Silvana Tenreyro and Michael Saunders. You can watch it at the top of the blog.

Bank of England's Andy Haldane: Q4 GDP to fall 3-4% short of November forecast because of Covid lockdown. #bankofengland #andyhaldane #ukeconomy

3.11pm GMT

Chris Williamson, chief business economist at IHS Markit, says November's flash PMI report suggests the US economy is strengthening.

He also points out that business confidence hit its highest level since February 2015.

The November PMI surveys provide the first postelection snapshot of the US economy, and makes for very encouraging reading, though stronger economic growth is quite literally coming at a price.

First the good news: business activity across both manufacturing and services rose in November at the strongest rate since March 2015. The upturn reflected a further strengthening of demand, which in turn encouraged firms to take on staff at a rate not previously seen since the survey began in 2009.

Business activity across both
US manufacturing and services rose in Nov at the strongest rate since March 2015. The upturn reflected a further strengthening of demand, which in turn encouraged firms to take on staff at a rate not previously seen since the survey began in 2009 pic.twitter.com/XGR8lVmvFn

2.59pm GMT

Just in: the US economy is growing at its fastest pace in over five years, according to the latest snapshot of American business activity.

The latest Flash US Composite PMI from IHS Markit shows that the recovery has gained further momentum this month, with service sector firms and factories both growing strongly.

U.S. private sector business activity rose sharply in November, as growth momentum picked up further. The overall expansion was the fastest for over five and-a-half years, as both manufacturers and service providers indicated a steeper upturn in output.

Encouragingly, there was a marked uptick in hiring during November to result in the steepest monthly rise in employment recorded since the survey began in 2009. Service providers boosted their workforce numbers amid burgeoning demand, but hiring slowed slightly in manufacturing.

US PMI smashes estimates:#DOW 29568.8 +1.04%#SPX 3588.65 +0.87%#NDX 11998.2 +0.77%#RTY 1805.96 +1.15%#VIX 22.78 -3.88%

2.45pm GMT

Stocks have opened higher in New York, as Covid-19 vaccine hopes override concerns over the escalating health crisis in the US.

US Opening Bell

US bourses kicking off the week in fine fettle. A shot in the arm from vaccine optimism perhaps?

DOW UP 197.47 POINTS, OR 0.67%, AT 29,460.95

S&P 500 UP 20.87 POINTS, OR 0.59%, AT 3,578.41

NASDAQ UP 64.82 POINTS, OR 0.55%, AT 11,919.79

Markets are now caught in no man's land, with investors increasingly desperate for the gap between the discovery and physical distribution of the vaccine to be minimised.

The rise in new Covid-19 cases - and indeed lockdowns - brings the need for a rapid roll-out of an acceptable vaccine into sharp focus. In the meantime, the human and economic damage continues unabated as governments remain well aware of the need for easing measures.

2.31pm GMT

Deutsche Bank has hailed the AstraZeneca/Oxford trial results, predicting that it will allow some industrial nations, including the US and UK, to achieve herd immunity to Covid-19 by next summer.

Analysts Robin Winkler and George Saravelos told clients that their updated analysis suggests the majority of the developed world is on track to immunize its vulnerable population to COVID by the spring, and the entire population by mid-year.

Depending on the pace of vaccine distribution there may even be upside to this estimate with some countries achieving herd immunity before summer.

The combined vaccine news of the last few weeks is an unprecedented victory for science that will lead to a much faster pace of normalization to our daily lives compared to what we would have assumed just a few weeks ago. By spring, things should be looking much closer to normal.

EXCELLENT on herd immunity

"By the middle of the year, US & UK should reach FULL HERD IMMUNITY. This timeline is also realistic for Canada and Japan.'

- Deutsche Bank

Deutsche Bank: "We should all be smiling this morning. With Astrazeneca releasing trial results, our analysis suggests we are now on track for the majority of the developed world to immunize its vulnerable population to COVID by the spring and the entire population by mid-year"

1.59pm GMT

Bloomberg is also reporting that vaccine optimism is pulling the US dollar down.

The dollar dropped to a two-and-a-half year low as the prospect of vaccine roll-outs added to headwinds for the world's reserve currency.

The Bloomberg Dollar Spot Index fell as much as 0.2% to an April 2018 low after U.S. officials said vaccinations may start in less than three weeks. The pound and the Norwegian krone led gains against the greenback Monday, while the yield on 10-year U.S. Treasuries rose three basis points to 0.86%.

US dollar falls to 2018 lows amid covid vaccine optimismhttps://t.co/YrMSZp7AfK pic.twitter.com/UPfEh4IBWt

1.46pm GMT

The US dollar has dipped by around 0.3% today, showing that investors are feeling more confident following the trial results of AstraZeneca's Oxford vaccine.

The dollar is a classic safe-haven when markets are edgy, and tends to fall when traders start buying riskier assets instead.

The AstraZeneca-Oxford vaccine is produced at cost price and not for profit, and will thus cost a lot less than Pfizer and Moderna vaccines, which are made for profit. Given these benefits, the vaccine is likely to be in huge demand from poorer regions of the world.

The key takeaway point is that we are getting ever closer to hopefully becoming immunised to COVID, which means life can return to more normal levels soon. As such, investors are continuing to shrug off concerns about the ongoing global surge in coronavirus cases and piling back into sectors that had been hurt badly by the pandemic such as travel and leisure. Crude oil prices have also risen as investors hope that with the development of vaccines, there will be a quicker return to normal levels of travel and economic activity.

The world should be jumping for joy as the AstraZeneca delivery is a big deal as most of the developed world will be able to immunize its most at-risk population to COVID by the spring and likely the entire community by mid-year.

Equities up, commodities up, bond curves bear- steepen, dollar down. Risk sentiment improves as the AstraZeneca-Oxford vaccine shows 70% effective for participants with covid-19, with the effectiveness rising to 90% for using half a dose followed by a full one. The AstraZeneca-Oxford vaccine should benefit many EM countries as it costs only a fraction of the others and will be manufactured in EM countries from India to Brazil.

1.20pm GMT

An investment trust backed (and managed) by the asset manager Schroders and Big Society Capital, a UK social impact investor, plans to float on the London Stock Exchange just before Christmas, to tap into rising demand for positive social impact investments.

The current coronavirus pandemic is exacerbating many social challenges from homelessness to domestic abuse. Social impact investing can directly help the charities and social enterprises tackling these problems."

The connection between social impact and investment is deepening and expanding across financial markets."

12.30pm GMT

Here's our economics editor Larry Elliott on the sharp fall in UK service sector activity this month:

The first snapshot of the UK economy during England's four-week lockdown has shown evidence of a looming double-dip recession as tougher restrictions took a toll of large chunks of service-sector output.

The monthly survey from IHS Markit and Cips reported the steepest fall in activity since May, with the closely watched purchasing managers' index (PMI) dropping from 52.1 to 47.4. A reading below 50 indicates that the economy is contracting.

12.19pm GMT

Europe's early rally is losing a little of its zip too.

Having hit a near nine-month high this morning, the Europe-wide Stoxx 600 is now up a modest 0.15% today.

What's striking is the diminishing positive effect each new batch of vaccine news has on financial assets. This is the third Monday in a row when encouraging vaccine news has hit the markets, and each time the positive impact on equities and other risk-linked assets has been getting smaller.

What's worse, the playbook so far has been that the initial boost typically fades by the next day, as the brightening prospects for next year are not quite enough to eclipse the grim lockdown reality that investors have to grapple with right now. A vaccine is great news, but the global economy has to get through a long winter first.

12.07pm GMT

The early stock market rally seems to be petering out.

The FTSE 100 is now down 2 points at 6348, erasing its earlier gains.

11.59am GMT

The pound has hit its highest level against the US dollar since early September, as hopes of a Brexit deal rise.

Sterling has gained 0.6% this morning, to $1.336, while the euro has picked up 0.4% against the dollar.

Strong gains for the pound versus both the dollar and the euro during early Monday trading, as investors price in increasing chances of a deal being reached between the UK and the EU.

While negotiators are still struggling to reconcile opposing views on fishing and legal matters, it appears increasingly likely that both sides are committed to reaching an agreement, as illustrated by the statement made on Sunday by the Chancellor of the Exchequer, Rishi Sunak, who said he is confident in a trade agreement being reached with the EU soon.

11.25am GMT

Back in the City, shares in Cineworld have jumped 21% this morning after it secured financial lifelines worth around $750m (560m).

London-listed Cineworld, which shut all of its 660 movie theatres in the US and the UK in October, said the financial agreements mean it has enough liquidity to make it through next year - as long as cinemas are allowed to reopen by May.

The company has agreed financial measures with lenders including a new $450m debt facility. Other agreements include a waiver on all covenants on payments on its debt - which stands at $4.9bn - until June 2022 and an extension on its $111m revolving credit facility to 2024. In addition, Cineworld has accelerated the closure of its US tax year which will generate a $200m tax refund early next year.

11.02am GMT

Economists are pointing out that today's PMI report isn't as bad as expected, even though it shows the UK private sector is shrinking again.

Although the composite PMI is a six-month low of 47.4 in November, that's better than feared - with manufacturing output holding up, and business optimism growing.

Optimism around a vaccine may have increased some investors' willingness to look through short-term economic weakness, yet this morning's data highlight just how quickly momentum is fading in parts of the UK economy.

The two-speed nature of the recovery is increasingly clear. The manufacturing sector continues to tick along at a healthy pace, while new lockdowns have slammed the brakes on the nascent recovery in the service sector. It is encouraging however to see that expectations for future business activity are at the highest level in over five years. Businesses, like the markets, seem to be pinning their hopes on vaccines accelerating the return to some form of normality in 2021."

Flash UK #PMI for November reasonably encouraging as services fell much less than in the first lockdown and manufacturing, having not locked down this time, actually picked up a little from October. But PMI services excludes retail so will not pick up fall in non-essential stores https://t.co/rN8dXGoweI

Despite the unknowns, the hope offered by the vaccine breakthroughs could be powerful in helping to curb the pace of redundancies as firms have more incentive to keep staff on furlough with the prospect of an improving picture by March.

Nevertheless, while the outlook is looking brighter for next year, there's still a challenging winter to endure, and so businesses will likely remain cautious amid the ongoing uncertainty."

Based on the relationship between the composite PMI and GDP during the first lockdown, a reading of 47.3 would be consistent with GDP falling by about 2% m/m in November. That's less downbeat than our current forecast of an 8% m/m drop.

However, the drop in the composite employment balance (from 43.4 in October to 42.1 in November) suggests that firms are still laying off workers. A surge in unemployment once the furlough scheme ends, possibly from 4.8% in September to as high as 9.0%, could prolong the crisis.

10.52am GMT

Duncan Brock, Group Director at CIPS (which produces the UK PMI report with Markit), says there are deeps concerns" about the health of the economy, following this month's slump in service sector activity.

He's also concerned about the acceleration in job shedding across the UK private sector:

Where manufacturing had a flat out month with the highest level of growth since September, the dominant services sector took another sudden tumble into contraction territory, resulting in deeps concerns for the health of the UK economy.

News of potential vaccines bringing a return to normality lifted the mood with a big rise in optimism to its highest since March 2015.

10.40am GMT

Manufacturing companies have reported that supplies are taking longer to arrive, due to bottlenecks at UK ports.

Today's PMI report shows that 32% of the survey panel reported longer lead times from suppliers, while only 2% noted an improvement. With supplies being delayed, companies are being forced to pay more for raw materials and parts.

Worsening supplier performance was widely linked to shipping delays amid bottlenecks at UK ports. Rising freight costs and stretched supply chains contributed to the strongest rate of overall input price inflation for two years.

10.10am GMT

The sharp fall in private sector output this month shows that business activity collapsed in large parts of the economy, says Chris Williamson, chief business economist at IHS Markit.

He says the UK could suffer a double-dip' downturn, having shrunk in the first and second quarters of 2020, before recovering in Q3.

A double-dip is indicated by the November survey data, with lockdown measures once again causing business activity to collapse across large swathes of the economy. As expected, hospitality businesses have been the hardest hit, with hotels, bars, restaurants and other consumer facing service providers reporting the steepest downturns.

Some comfort comes from the data suggesting that the impact of the lockdown has not been as severe as in the spring, and manufacturing has also received a significant boost from inventory building and a surge in exports ahead of the UK's departure from the EU at the end of the year, providing a fillip for many companies. However, while the lockdown will be temporary, so too will this pre-Brexit boost.

The health of the economy in the new year therefore remains highly uncertain, but it is very encouraging to see the survey's gauge of business optimism surge higher in November. Improved prospects for the year ahead are thanks mainly to the news of successful vaccine trials, which at last provides a light at the end of the tunnel for many businesses."

10.06am GMT

There is some good news in the PMI report, though -- UK business confidence has jumped this month, to its highest level in over five years.

Bosses are more optimistic about their prospects over the next year, following recent encouraging vaccine trial data.

The degree of optimism improved since October and was the strongest since March 2015.

While some firms simply commented on an expected rebound from low levels of activity in November, there were also widespread reports that hopes of an end to COVID-19 restrictions and positive vaccine news had spurred business confidence about the year ahead.

9.46am GMT

Just in: The UK economy is shrinking again this month as the latest wave of lockdown restrictions hit service sector companies, a new survey shows.

November has seen the sharpest fall in UK private sector output since May, according to the latest Flash UK Composite PMI report from IHS Markit and CIPS.

Around 31% of the survey panel reported lower business activity in November, while only 21% signalled an expansion.

Reduced output was almost exclusively attributed to greater restrictions on trade due to the COVID-19 pandemic and heavily concentrated in consumer-facing parts of the service economy.

Flash #PMI shows #UK joint #services & #manufacturing activity contracted in November as #lockdown restrictions hit services activity markedly; composite output index at 6-month low of 47.4 (52.1 in Oct). Services PMI at 45.8 (51.4); but manufacturing PMI up to 55.2 (53.7)

Lower employment was mainly attributed to redundancy measures, although some service providers also commented on the renewed use of the government furlough scheme during the latest survey period.

9.30am GMT

Europe's economy has fallen back into a contraction this month, according to the latest survey of purchasing managers in the region.

Data firm Markit says the eurozone private sector suffered a steep downturn in November as governments imposed new lockdowns to slow the spread of Covid-19.

Flash #PMI signalled a sharp downturn across the Eurozone economy in November, as countries introduced more aggressive lockdown measures. #PMI at 45.1 (Oct - 50.0), a 6-month low but still much higher than in the spring lockdown. Read more: https://t.co/ta291Yw2wG pic.twitter.com/7n4ms1vYFZ

The eurozone economy has plunged back into a severe decline in November amid renewed efforts to quash the rising tide of COVID-19 infections.

The data add to the likelihood that the euro area will see GDP contract again in the fourth quarter. The service sector has once again been the hardest hit, especially consumer-facing and hospitality businesses, though weakened demand has also taken a toll on manufacturing.

Still not sure about the signal from PMI *levels*, but let's say it could have been worse. pic.twitter.com/WFyqmpmVEf

At 39.9, the flash composite PMI for France fell from 47.5 to indicate a third successive monthly decline in business activity and the steepest drop since May, acting as a major drag on the region as a whole. A third, and accelerating, month of services decline was accompanied by a downturn in factory output for the first time since May.

Germany, in contrast, continued to expand, albeit with the flash composite PMI dropping from 55.0 to 52.0 to register the weakest expansion since the recovery began in July. Although manufacturing output growth eased, it remained among the highest seen over the survey's history. However, service sector activity fell for a second month running, contracting at the sharpest rate since May.

9.15am GMT

AstraZeneca's shares have dipped by almost 2% this morning, making it one of the leading fallers on the FTSE 100 index.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says this is because its trial results showed an average efficacy of 70% (although 90% for one dosage plan).

AstraZeneca has been on a disappointing slide this morning, as the efficacy rates for its vaccine fell short of its rivals.

With the bar set high by Pfizer and Moderna, even though the late stage trials were better than expected, AstraZeneca's shares didn't get a booster shot after it said efficacy results came in on average at 70%.

9.05am GMT

Shares in travel company TUI have risen 8% this morning, while easyJet is up 4.6%, reflecting optimism that the holiday sector could recover next year.

Pub chain Mitchells & Butler have gained almost 7%, and convenience food producer Greencore is up 5%.

AstraZeneca announced that its vaccine candidate developed with the University of Oxford is around 70% effective. Whilst normally this would be an excellent result, the fact that it comes after Moderna and Pfizer claiming 95% effectiveness has certainly taken the shine off the announcement. However, on the plus side, the AstraZeneca jab is far cheaper and easier to store than the other two.

Adding to the upbeat mood in the UK, the government confirmed that lockdown will end on 2^nd December and the UK will move to a 4 Tier system. This should provide a massive boost to the high street retailers which have been a clear victim of the covid pandemic. Shops, along with bars, restaurants and gyms reopening in all areas of the UK in time for the key Christmas trading period means that the UK economy will once again be able to move forward on its recovery path.

8.52am GMT

Vaccine optimism has lifted European stock markets to their highest level since the end of February.

The Europe-wide Stoxx 600 index has gained 0.7% this morning, lifted by gains in Frankfurt, Paris, Milan and Madrid as well as in London.

8.25am GMT

Oil giant BP and Royal Dutch Shell are also among the risers in London, up around 2.7% each, following the pick-up in the oil price this morning.

8.19am GMT

At 6385 points this morning, the FTSE 100 is approaching levels last seen in June (although still lower than last Monday), as this chart shows.

8.10am GMT

The London stock market has opened higher, following AstraZeneca's vaccine trial news.

The blue-chip FTSE 100 index has gained 0.5%, or 34 points, to 6385 points. That lifts it close to the five-month high seen a week ago (after Moderna reports its vaccine trial results).

8.05am GMT

The oil price has hit its highest level in almost three months this morning.

Brent crude is up 1.67% at $45.71 per barrel, its highest level since early September.

Positive sentiment continues to be driven by the recent good news about the efficacy of coronavirus vaccines in development and the expectation that the OPEC+ meeting at the end of this month could see the group extend current cuts by 3-6 months"

7.59am GMT

The success of the AstraZeneca/Oxford vaccine could be particularly important to the UK economic recovery, as the government has ordered 100 million doses. That's enough to vaccinate most of the population (under the two-jab regimen).

Here's business secretary Alok Sharma:

Very promising data from the Oxford/AstraZeneca Phase III clinical trials

We are on the cusp of a huge scientific breakthrough that could protect millions of lives

The UK has secured early access to 100m doses of their vaccine - on top of 255m doses from other developers https://t.co/WmdC9dGL31

7.50am GMT

Here's AstraZeneca's CEO, Pascal Soriot, on this morning's vaccine trial results:

Today marks an important milestone in our fight against the pandemic. This vaccine's efficacy and safety confirm that it will be highly effective against COVID-19 and will have an immediate impact on this public health emergency.

Furthermore, the vaccine's simple supply chain and our no-profit pledge and commitment to broad, equitable and timely access means it will be affordable and globally available, supplying hundreds of millions of doses on approval."

7.35am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Stock markets are heading higher this morning after AstraZeneca announced that its Covid-19 vaccine is effective in preventing infection from the virus.

The pharmaceuticals firm reported that trials of its vaccine developed by Oxford University showed it can be 90% effective in giving immunity to Covid-19.

Today we announced high-level results from the AstraZeneca @UniofOxford #COVID19 vaccine clinical trials. https://t.co/eTz7cdY4hN pic.twitter.com/d6Wzo11Ftr

The Covid-19 vaccine from AstraZeneca and Oxford University has shown 90% efficacy in global trials, similar to PfizerBioNTech and Moderna (around 95%)...and crucially it can be stored at fridge temperature. AZ will file for regulatory approval; wants to make 3bn doses next year

AstraZeneca/Oxford Covid-19 vaccine: no hospitalisations or severe cases of the disease were reported in those receiving the vaccine

These findings show that we have an effective vaccine that will save many lives. Excitingly, we've found that one of our dosing regimens may be around 90% effective and if this dosing regime is used, more people could be vaccinated with planned vaccine supply.

Today's announcement is only possible thanks to the many volunteers in our trial, and the hard working and talented team of researchers based around the world."

"We've got a a vaccine that is able to protect against coronavirus disease" Prof Andrew Pollard of the @OxfordVacGroup on the Oxford/AstraZeneca vaccine. Bright news on a dark November morning @BBCr4today

Live Market Update from the CMC dealing desk - European Opening Calls:#FTSE 6383.3 0.5%#DAX 13221.44 0.64%#CAC 5533.86 0.69%#IBEX 8014.77 0.46%
Prices are indicative only. $FTSE $DAX $CAC $IBEX

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/