US recovery gathers pace; copper hits $10,000; UK household wealth soars – as it happened

Graeme Wearden

from on 2021-04-29 18:09 (#5H70X)

Rolling coverage of the latest economic and financial news

Latest: Pensions and house prices push national wealth to record
Copper prices hits 10-year peak
Wall Street hits new highs
US GDP rose by 1.6% quarter-on-quarter
Experts: US economy in robust recovery
Eurozone economic optimism has jumped
UK workers come off furlough, as vacancies jump

7.09pm BST

That's all for today. Here's a quick round-up.

The US economy has begun 2021 with solid growth. GDP rose by 1.6% in the first quarter of the year, an annualised rate of 6.4%, lifted by government and consumer spending, and business investment.

Buoyed by the two rounds of stimulus cheques sent out in the first three months of the year, first-quarter GDP growth accelerated to 6.4% annualised, driven by a massive 10.7% surge in consumption.

That left the level of GDP less than 1% off its pre-pandemic peak. It will recapture that level in the second quarter and, with the pace of growth we expect, any remaining output gap should be eliminated before the end of this year.

7.03pm BST

Some late travel news... the High Court has told Ryanair that it has to compensate passengers whose flights were cancelled due to 2018 pilot strikes.

Which? has the details:

Ryanair argued that the strikes were an extraordinary circumstance' and therefore out of its control. This was despite the fact that the official adjudication scheme, AviationADR, ruled that strikes by its own employees were its responsibility and it had to pay

Ryanair simply left the adjudication scheme and, in December 2018, the CAA announced enforcement action against the airline.

Ryanair refused to pay compensation to passengers affected by industrial action by pilots in 2018...Ryanair could not claim delayed/cancelled flights were extraordinary circumstances'. High Court has today agreed with our interpretation" @UK_CAA

6.13pm BST

UK household wealth has hit a record high during the pandemic, partly driven by rising house prices, defined contribution pensions schemes and saving during the pandemic

Figures released earlier today by the ONS show that the household sector's net worth grew by 9.1%, or nearly 1 trillion, to 11.4 trillion between 2019 and 2020.

A rise in the value of land in 2020 increased growth of the household sector's net worth by 3.8 percentage points, and was the result of an 8.1% increase in UK average house prices. The reduction in stamp duty rates are likely to be a main factor driving increases in house prices.

Increases in the value of insurance, pension and standardised guarantee schemes' contributed to a further growth of 3.3 percentage points in the sector's net worth and was the result of an increase in the value of defined benefit pension schemes, that rose mainly because of a fall in gilt yields in 2020.

Ashley Seager, co-founder of the Intergenerational Foundation, a campaign group promoting the interests of younger and future generations, said the figures demonstrated two issues that were being placed on younger people.

The first comprises the housing wealth transfer from younger borrowers to older homeowners. The second is the mountain of government debt, which has ballooned thanks to Covid-19, that will be passed on to younger generations to bear along with lower standards of living, more precarious employment and far lower pensions in old age," he said.

6.00pm BST

Here's a neat chart putting the US recovery in historic context:

The $1.8 trillion stimulus package has contributed to a quick economic rebound compared to the long slog after the financial crisis. It's a lesson for the next U.S. government in crisis: Go big or go home. @GinaChon explains on Capital Calls. https://t.co/NcIeGYHAJR pic.twitter.com/ois6HQB5iG

5.47pm BST

Back in New York, the early rally has somewhat fizzled out.

The S&P 500 index is now up just 0.1%, or 4 points, at 4,188, while the Nasdaq has dipped into the red.

EBay said Wednesday afternoon that it expects 91 cents to 96 cents in adjusted earnings per share and revenue of $2.98 billion to $3.03 billion in the second quarter. Analysts polled by Refinitiv had expected 98 cents per share and $2.98 billion in revenue.

Several investors were spooked by the lighter-than-expected outlook and either downgraded the stock or lowered their price targets.

Ford Motor Co. booked a $3.3 billion profit in the first quarter, but warned that it could lose as much as half of its planned vehicle production for the second quarter amid a worsening global semiconductor shortage - a prospect one analyst called jaw dropping."

The Dearborn automaker generated $36.2 billion in revenue and delivered a profit margin of 9%. Executives attributed the results to efforts to mitigate the impact of the chip shortage, a refreshed vehicle portfolio in the midst of being rolled out, and longer-term changes aimed at improving the fundamentals of the business.

5.35pm BST

European stock markets also ended the day lower, despite the surge in economic and consumer confidence reported this morning.

Germany's market underperformed, with the Frankfurt's DAX ended the day down 0.9%.

The Dax is a noticeable laggard in Europe following disappointing labour market data.

While the unemployment rate holds at 6%, the unemployment change unexpectedly increased by 9k. The data comes hot on the heels of weaker German GFK consumer confidence numbers and points to the Eurozone's largest economy struggling amid its third Covid wave.

5.10pm BST

Blimey. WPP, the world's biggest advertising company, is withholding share incentive awards from former CEO Sir Martin Sorrell.

In its annual report, released this afternoon WPP alleges that its former chief had leaked confidential client information to the media during his time at the company.

...the 2016 and 2017 EPSP Awards granted to Sir Martin Sorrell, the former Group Chief Executive, will lapse as a result of Sir Martin Sorrell's disclosure of confidential information belonging to WPP and certain of its clients to the media during his tenure as a WPP director.

Just another case of peanut envy," Sorrell told Reuters. It's a bit rich that they're accusing me of leaks, given their own over the last three years."

They've had to go back several years to try and find an excuse to deny me what's mine. I've left it to my lawyers to deal with," Sorrell said.

Full statement from Sir Martin here: pic.twitter.com/MwdauIJ6Hb

WPP has denied founder and former boss Martin Sorrell share awards because they allege he leaked confidential information to the press.

His response is quite something: pic.twitter.com/p7gELbdZj8

4.47pm BST

After a late slide, the UK's blue-chip stock index has ended the day roughly where it began.

The FTSE 100 couldn't hold the 7,000 point mark, and has closed 2 points lower at 6961 points.

4.28pm BST

Fast food chain McDonald's has beaten Wall Street estimates, after returning to pre-pandemic sales levels.

Global like-for-like sales grew 7.% in the quarter, overtaking 2019 levels, and well ahead of forecasts of 4.7% growth.

KO: "For the quarter, global comp sales increased 7.5%, with growth across all segments. And, comps were up significantly in March as we started to lap the impact of COVID-19." $MCD pic.twitter.com/FDvNwayh6F

Chicken-focused menu items, like the Spicy Chicken McNuggets and Crispy Chicken Sandwich, helped fuel sales this quarter.

We're two months past the initial launch of late February, and we still feel really good about the volume and unit movement that we're seeing," Erlinger said about the new chicken sandwich.

This past quarter, we saw the power of our system at work as our global comp sales & revenues surpassed pre-pandemic levels. Check out McDonald's Q1 2021 earnings. https://t.co/hRVGfPdz9R pic.twitter.com/Q0bT82DacB

4.01pm BST

Back in the UK, the boss of NatWest has said the bank would move its headquarters from Edinburgh to London if Scotland voted for independence.

Alison Rose said an independent Scotland would be too small to support the banking group, formerly known as Royal Bank of Scotland, which has been based in the Scottish capital since it was founded 294 years ago.

In the event that there was independence for Scotland our balance sheet would be too big for an independent Scottish economy, and so we would move our registered headquarters, in the event of independence, to London."

3.25pm BST

Copper has hit its highest level in a decade, amid growing worries that supply can't keep pace with robust demand.

Prices rose as much as 1.3% to $10,008 a ton on the London Metal Exchange. Prices hit a record $10,190 in February 2011.

Copper topped $10,000 a metric ton for the first time since 2011 https://t.co/kVrXMP2L0v

Copper, the world's most important industrial metal, has traded above $10,000 for the first time in a decade as the rebound from the coronavirus pandemic unleashes a surge of demand from China and the developed world that could not be matched by supply.

After a wobble in March due to concerns about fresh lockdowns in Europe and a strengthening US dollar, copper has resumed the powerful rally that started a year ago when it sank to $4,300 a tonne.

Copper hits 10-year high above $10,000 a tonne https://t.co/QuAX4DJJ6K

#Copper topped $10,000 a ton for the first time since 2011. Rally fueled by stimulus measures, zero interest rates & green transformation. Push toward cleaner energy sources seen boosting consumption of copper, used in everything from EV to solar power. https://t.co/CW12gbAedj pic.twitter.com/Gzs4iffAgi

2.52pm BST

In New York, the S&P 500 index and the tech-focused Nasdaq have both hit record highs at the start of trading.

Optimism about the US recovery has been boosted by today's GDP report, showing strong growth in Q1.

FACEBOOK SHARES HIT RECORD HIGH$FB

S&P 500 opens at a record after blowout earnings from Facebook and Apple https://t.co/t1OLjZcF8h

2.32pm BST

The number of American's filing new unemployment claims remains at its lowest level since the pandemic.

Around 553,000 initial claims for jobless support were filed last week, down from an (upwardly revised) 566,000 in the previous seven days.

UI Claims: week ending 4/24:
initial claims (697m reg + PUA)

reg state: actual 575k
seasonally adj reg 553k
4-wk avg (SA): 612k
yr-ago 4-wk avg: 4.668m

PUA 122k

insured unempl wk ending 4/17
act.: 3.791 m
S.A.: 3.660 m https://t.co/O8YMIoXCUf 1/4 pic.twitter.com/xgth6wRmDI

Encouraging trend continues: initial claims for #unemployment fell to #Covid19 low in w-e Apr 24

Regular claims
553k (SA): -13k
575k (NSA): -9k

PUA (NSA)
122k: -12k

Still high 697k new weekly jobless benefits claimants, but very solid trend: under 1mn since mid-Mar pic.twitter.com/n1FSBsdWdj

Further progress!! Both regular initial claims (nsa) and PUA initial claims fell, marking the fourth straight week of decline for total initial claims (nsa). Clear downward movement is great news. pic.twitter.com/HUnsOvgXtH

2.02pm BST

The US economy took off in the first quarter soaring 6.4% as rising vaccinations, a massive round of government stimulus and a steady recovery in the jobs market helped reverse some of the impact of the coronavirus pandemic.

The annualized rate, released by the Commerce Department on Thursday, suggests the US economy is firmly on the road to recovery. In normal times US gross domestic product (GDP) - the broadest measure of the economy - grows at about 2-2.5% a year but the pandemic triggered wild swings as the country went into lockdown and businesses shuttered.

1.57pm BST

Economists, analysts and investors are broadly welcoming the acceleration in US growth in January-March.

Joseph Brusuelas, chief economist at consultancy firm RSM US, says the US has made a robust start' to 2021.

US Q1'21 GDP Major Takeaway: Robust start to 2021 growth picture. Inside the report one gets the sense that shift to service demand in the middle of the year & accumulation to support the resurrections in domestic demand will turbocharge Q2'21 growth. We expect 10.7% growth in Q2

US economy started 2021 with strong momentum

Real #GDP:
+6.4% in Q1 (annualized)
+1.6% (simple terms)

Annual trend: +0.4% y/y
Shortfall relative to pre-#COVID19: -0.9%

Outlook for 2021:
+7.2% average
+7.4% Q4/Q4

via @OxfordEconomics pic.twitter.com/9twUztZxvV

Economic recovery picks up. GDP is now less than 1% below its pre-pandemic peak. Looking ahead, there will likely be a surge in economic activity & hiring. There may be more than $2 trillion in excess savings built up during the pandemic that can satisfy pent up demand. pic.twitter.com/WWhf7SMrGV

#GDP trade deficit expanded as imports rose 5.7 percent, while exports edged down 1.1 percent. This will be a major release valve for any inflationary pressures the economy develops this year

1.55pm BST

Consumer spending jumped at an annualised rate of 10.7% in the first quarter of 2021, a time in which Americans received stimulus checks to help them through the pandemic.

Spending on durable goods (such as cars, books, computers and furniture) surged by an annual rate of 41% (or just over 10% during the quarter).

US Q1'21 GDP: Outlays on goods up 23.6%, durables 41.4%, non durables 14.4% & services 4.6%. Gross private domestic investment declined by 5%. 4.8% decline in structures. Intellectual property investment up 10.1%, equipment up 16.7%. Residential investment up 10.8% pic.twitter.com/I9UP2uLx1I

1.44pm BST

ECONOMY WATCH: US economy grew robust 6.4% in the first quarter, GDP shows. Vaccines, stimulus & more hiring do the trick. Consumer spending jumps 10.7%. Biz investment also up 10%. Second-quarter GDP expected to be even stronger. One caveat: inflation rises at 3.5% annual pace

1.39pm BST

Boom! The US economic recovery accelerated in the first three months of 2021.

US GDP rose at an annualised rate of 6.4% in January-March, up from annualised growth of 4.3% in October-December.

U.S. economic output rose 1.6% in the first quarter (a 6.4% annual rate), propelled by vaccines, reopenings and stimulus $$$.https://t.co/Ie4K2YfXHq

The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports.

Imports, which are a subtraction in the calculation of GDP, increased.

1.14pm BST

Inflation in Germany has risen again this month.

Germany's annual consumer price inflation rate jumped to 2.1% (on a harmonised basis) in April, up from 2.0% in March.

Germany CPI (Apr) comes in at 2.1%, exp: 2%, prev: 2%

Bad news for the ECB and the Eurozone economy. Germany inflation rate rises to 2.0% YoY in April from previous 1.7% and more than expected 1.9%. Inflation jumped also in Spain to 2.2%, much more than expected 1.3%. @graemewearden

Good Morning from #Germany, where inflationary pressure keeps rising. German import prices rose by 6.9% YoY, the highest rate since Apr2011, vs 6.0% expected, mainly due to energy prices, which significantly exceeded experts' expectations. pic.twitter.com/IYKA9LfapI

1.08pm BST

Hong Kong is the most expensive city in the world to rent a luxury apartment, followed by New York, Singapore, London and Sydney, according to the estate agent Knight Frank.

As soon as the passenger numbers return via the main transport hubs, we will see fairly a rapid correction of the recent rent reductions.

Stock will return to the short-term Airbnb rental market and with a normalisation of office occupancy, the undersupply of prime property will drive rents upwards. We are already seeing this starting to materialise in certain areas for the very best properties and it's only a matter of time before this feeds through to the wider market."

12.43pm BST

Here's economics editor Larry Elliott on the drop in workers on furlough this month:

Workers are starting to come off furlough as a surge in spending by UK consumers allows businesses to start reopening after their long winter shutdown, according to the latest official snapshot of the economy.

In its weekly digest of the latest indicators of activity, the Office for National Statistics (ONS) reported that the proportion of the workforce on furlough of all businesses dropped from 17% to 13% during April.

12.37pm BST

Economic sentiment in the eurozone went through the roof this month, says Peter Vanden Houte of ING.

He writes:

The European Commission's economic sentiment indicator soared in April, with the services sector now also in expansion mode. We can now declare the Covid-19 recession over. Inflation expectations also continue to increase.

The European Commission's economic sentiment indicator surged to 110.3 points in April from 100.9 in March, dwarfing the consensus forecast of 102.2.

In two months' time sentiment has gained 16.9 points, now firmly standing above its long-term average. Amongst the bigger member states, all countries saw higher sentiment figures, with the Netherlands gaining 10.7 points, Spain 9.1, France 8.5, Germany 5.7 and Italy 5.3.

Eurozone sentiment has improved so much, @PVandenHoute says we can now declare the Covid-19 recession overhttps://t.co/0AJppF0PwC

12.32pm BST

In another boost, economic optimism across Europe has surged to its highest levels in over two years, amid hopes that the economy will recover from the pandemic.

The EC's latest Economic Sentiment Indicator (ESI) jumped sharply this month, lifted by hopes of an economic recovery among both consumers and businesses.

Households' expectations improved both in respect of the general economic situation in their country and their personal sphere, as measured by their future financial situation and their intentions to make major purchases.

Consumers' views on their past financial situation, by contrast, showed no signs of a recovery from the COVID-19 induced slide, improving only marginally on the month.

Eurozone economic confidence +9.4pts in April to a strong 110.3 (v mkt exp of 102.2) with gains in consumer and business confidence.
Suggests optimism re vaccines and reopening and a strong growth rebound ahead.
(Bloomberg chart) pic.twitter.com/hE3slwxb8U

12.09pm BST

The number of UK workers on furlough has fallen, in a sign that the economy is picking up as the lockdown eases.

New figures from the Office for National Statistics show that the proportion of the workforce of all UK businesses on furlough fell to 13% in the two weeks to April 18th, down from 17% in the previous fortnight.

The volume of UK online job adverts was at 103% of its average February 2020 level on 23 April 2021; this is an increase of 4 percentage points from the previous week and the first time it has exceeded its February 2020 average level since 6 March 2020.

11.32am BST

Wall Street is also on track to open higher, after Apple and Facebook both beat expectations last night with some really sparkling results.

BREAKING:

*S&P 500, NASDAQ FUTURES JUMP TO RECORD HIGHS AFTER APPLE, FACEBOOK BEAT ESTIMATES $DIA $SPY $QQQ $IWM $VIX $AAPL $FB pic.twitter.com/EFrnWQmCUl

The earnings bonanza continued last night with Facebook blasting through expectations, its Q1 revenue rising 48% to $26.2bn, while net income rose to $9.5bn or $3.30c a share. The increases were driven by a 12% increase in ads sold, as well as a 30% increase in average prices per ad. The company said it expects Q2 revenue to be just as good before a slowdown in the second half.

Expectations around an Apple earnings announcement is always high, and last night was no different. A year ago, Apple revenues were $58.3bn for Q2, while this year expectations were for a number of around $77bn, with the new 5G iPhone expected to drive sales.

The company raised the dividend by 7% to $0.22 per share and announced a $90 billion in share buybacks. Apple revenues grew more than 50% year-on-year, with total sales of $89.58bn vs around $77bn expected. EPS came in at $1.40 vs $1.00 expected. At all levels we can see Apple outperforming even the most bullish expectations.

The core iPhone business saw sales up 65% to $47.94 billion vs. $41.43 billion estimated. This was stunning - the iPhone remains the golden goose and way in which consumers become part of the Apple ecosystem. Services - a higher margin business that includes things like the Cloud, App Store, Apple Music - grew revenues by 26.7%. Revenues in China rose 87% - albeit this was in comparison to a quarter last year in which China was most affected by the pandemic. Shares rose 2% in the after-hours market. A really exceptional quarter - it's not a surprise that it exceeded quite a low bar, but noteworthy just by how much.

11.14am BST

In the City, strong earnings figures have driven the FTSE 100 index has back over the 7,000 point mark, towards the pandemic high seen earlier in April.

The blue-chip index is up 52 points at 7015, a rise of 0.75% today.

#ftse monthly levels and channel (4h chart) pic.twitter.com/8UepXDIWRu

Our first quarter performance was strong. Economic recovery advanced in many of our markets leading to improved transaction volumes and profitability.

This was particularly the case in our Financial Markets and in Wealth Management, which had its best ever quarter.

The owner of brands ranging from Ben & Jerry's to Marmite reported on Thursday that sales increased by 5.7% in the first quarter compared with 2020 once the effects of currency moves and changes to its collection of brands were stripped out.

Overall turnover fell by 0.9%, but currency moves accounted for a decline of 8%.

10.55am BST

German unemployment rose unexpectedly in April, as the pandemic continued to weigh on its recovery.

Companies also put more staff on shorter working hours via Germany's subsidized job protection schemes, signaling that demand was being hit by pandemic restrictions.

Germany, Unemployment Change (Apr) announced.

Forecast: -10

Actual: 9K#eurusd #ger30 #dax pic.twitter.com/uyiSECsCES

Germany Unemployment Change at 9K https://t.co/SnKnEyrGsg pic.twitter.com/GSTfCWVAZC

Compared to April last year, the number of unemployed has increased by 127,000. The unemployment rate recorded a year-on-year increase of 0.2 percentage points.

However, April 2020 was already massively affected by the Corona crisis. The consequences of this amount to an increase of around 500,000 unemployed or 1.1 percentage points in the unemployment rate.

The ongoing restrictions in many areas are slowing down the recovery, but are not leading to any new burdens overall."

March 2021: #employment slightly up on the previous month. https://t.co/qPPsOw3EQn

10.33am BST

The Covid-19 pandemic continues to hit Spain's economy.

New data this morning shows that the number of employed people in Spain fell by 137,500 people in the first quarter of 2021, compared to the previous quarter, as more jobs were lost.

Spain Unemployment Rate at 15.98% https://t.co/Ap66Xh9wpp pic.twitter.com/7vDkUgLzBT

After a year of COVID-19 many have simply stopped looking for work, while hundreds of thousands more are being supported by Spain's ERTE furlough scheme and are not reflected in the figures.

Overall, the number of unemployed grew by 341,000 from the first quarter of 2020 to the first quarter of 2021, while almost half a million jobs have been destroyed, highlighting the impact of the pandemic.

10.11am BST

Sweden's economy grew much faster than expected in the first quarter, despite the latest wave of Covid-19 infections.

Swedish GDP rose by 1.1% in the January-March quarter, beating forecasts of 0.5% growth.

One year after the outbreak of the pandemic in Sweden, GDP is now almost back at the same level as before the downturn last spring.

Swedish GDP Indicator Q1 Report - SCBhttps://t.co/ofnG58Avpf pic.twitter.com/67m8xV6J89

9.51am BST

Selling a stake in BT Sport would signal that the telecoms firm has confidence in its core consumer offer, says analysts at investment bank Jefferies.

Jefferies argues that any proceeds received from selling a stake in BT Sport would be an upside to market estimations of BT's fair value.

BT Sport carries zero value in our BT SOP. Tenuous estimation of revenue streams and indirect benefits has been required to justify rights cost.

Sport's value as a retention tool was diluted by Sky switching to less aggressive broadband strategy. Stepping back from sport signals BT's confidence in its core consumer offer, focused on FTTP.

Bidding for sports rights is an expensive and unpredictable business - securing them can be a big pull for subscribers and advertisers but it involves a big outlay and there is always a risk a rival could gazump you at the last moment - a trick BT itself has pulled in the past.

Plus at the moment the world of sports and sports rights is in a flux thanks to the pandemic - it's a very different world from the one in which BT launched as a challenger to Sky nearly a decade ago.

9.44am BST

In the banking world, NatWest CEO Alison Rose struck a cautiously optimistic tone this morning after announcing profits had nearly doubled in the first quarter.

Defaults remain low as a result of the UK Government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.

9.26am BST

Royal Dutch Shell has reported a better than expected profit of $3.2bn (2.3bn) for the first quarter of this year, eight times more than the final quarter of 2020, as global demand for fossil fuels returns.

The Anglo-Dutch company said rising oil and gas market prices helped its quarterly adjusted earnings rise sharply from $393m at the end of last year, and climb well above its $2.9bn profit for the first quarter last year.

9.24am BST

Telecoms and tech analyst James Robinson of GSMA Intelligence says BT could end up selling a stake in its sport business, divesting the whole BT Sport operation, or forming a joint venture.

Alternatively, the talks may not lead to a deal, he points out:

.@BTGroup in "early discussions" with "a number of select strategic partners" (e.g. Amazon, Dazn, Disney and some PE firms) over its BT Sport business - could result in divestment, sale of a stake, JV or nothing at all https://t.co/27dCSA4FAV

9.11am BST

UK telecoms group BT has confirmed that it is talks with a number of strategic partners' over the possible sale of a stake in its BT Sport operation.

Further to media reports, BT can confirm that early discussions are being held with a number of select strategic partners, to explore ways to generate investment, strengthen our sports business, and help take it to the next stage in its growth.

The discussions are confidential and may or may not lead to an outcome.

The telecoms operator has appointed the investment bank Lazard to explore a partial sale of BT Sport as it focuses on upgrading Britain's broadband network.

Cracking exclusive by @cg_williams and Ben Woods on possible part sale of BT Sport. Seems to suggest shift in focus under BT boss Philip Jensen. https://t.co/wIlOzbBJSM

8.54am BST

Heathrow has also repeated its criticism of the Civil Aviation Authority (CAA) for rejecting its bid to raise charges by 2.6bn to recoup its Covid losses.

On Tuesday, the CAA allowed Heathrow to raise its landing charges by 300m, but vetoed the larger request, saying it was disproportionate".

For starters, Heathrow's expected losses of 3bn during the pandemic need to be put in context. The airport has been able to raise debt at low interest rates throughout. Bond market investors can see that Heathrow, even without a third runway, remains a very safe lending proposition under all plausible regulatory conditions.

Heathrow's petulant reaction may have been provoked by the CAA's hint that, if funding becomes a problem, the shareholders, led by the Spanish infrastructure group Ferrovial and Qatar's sovereign wealth fund, could try injecting fresh equity. Any risks to ... actual financing are a matter for its shareholders, not for consumers to resolve," said the regulator.

8.42am BST

Why would restarting foreign holidays help UK exporters, as Heathrow claims?

Well, under normal times, a lot of the cargo actually travels on passenger jets, rather than on freight-only flights. That option shrank once the pandemic hit passenger travel.

Heathrow is the UK's biggest port, but 95% of cargo is carried in the hold of passenger planes.

Unused slots have allowed more dedicated freighter operations and higher rates for cargo have allowed airlines to keep operating some routes with low passenger load factors. However, despite our collective efforts, cargo volumes were down 5.0% in the first three months of 2021 compared to the same period last year. This shows the importance of restarting long haul passenger travel to reinstate the UK's supply chain and export routes.

8.34am BST

Heathrow CEO John Holland-Kaye says the airport's losses show the economic damage caused by the pandemic.

Restarting international travel from 17th May (the earliest date under the government's plan) will kickstart the recovery, Holland-Kaye argues:

These results show how COVID has devastated the aviation sector and British trade. Restarting international travel from May 17th will help to kickstart the economic recovery, allowing exporters to get their goods to market, as well as reuniting families who have been separated for over a year. Heathrow is gearing up for the recovery.

By acting early to cut costs and protect cash, we have put ourselves in a strong financial position to weather the storm and are ready to welcome back passengers, while keeping them safe. This would not be possible without the energy and commitment of my colleagues across Heathrow and I am very proud of what they have achieved.

7.56am BST

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

While underlying demand for travel remains strong, continuing uncertainty over Government policy means we have reduced our passenger forecast for the year to a range between 13 and 36 million, compared to 81 million in 2019.

As vaccinations are rolled-out and COVID levels fall, restarting travel to markets like the US will be critical to the UK's economic recovery and we will be prepared to scale-up our operations as demand returns.

Spain specifically, I'm afraid I just don't have the answer to that because the joint biosecurity centre will need to come up with their assessment and we can't do that until a bit nearer the time,"

Border Force's ability to provide an acceptable service for arriving passengers remains primary concern surrounding the restart and Ministers will need to ensure every desk is staffed to avoid unacceptable queues.

Heathrow Airport plunges to $459 million loss in first quarter - https://t.co/1iKRQ0Cc8t

Morning all!

- The FOMC left policy unchanged and Fed Chair Powell pushed back on early tapering expectations

It has a tremendous amount to do with vaccination and re-opening of the economy - that's really what has been moving markets a lot in the last few months."

The overall financial stability picture is mixed, but on balance it's manageable.

Precious Metals update:#Gold 1785 +0.17%#Silver 2636 +0.64%#Platinum 1226 +0.39%#XAUUSD #Commodities

LME update:#Aluminium 2421 +0.82%#Copper 9962 +0.7%#Nickel 17465 +0.26%#Lead 2101 +0.19%#Zinc 2937 +0.15%#Metals #Commodities

European Opening Calls:#FTSE 6975 +0.16%#DAX 15323 +0.20%#CAC 6322 +0.23%#AEX 713 +0.15%#MIB 24512 +0.21%#IBEX 8822 +0.25%#OMX 2244 +0.23%#STOXX 4022 +0.18%#IGOpeningCall

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