Spell of unusually cold winter weather followed by heatwave pushes up cost of fruit and vegBritain’s shop prices have risen for the first time in more than five years as the heatwave pushed up the cost of fruit and vegetables.The latest BRC-Nielsen figures show that overall shop prices rose 0.1% in August, entering inflationary territory for the first time since April 2013. Continue reading...

The weekly 5km runs are a global phenomenon. But they were born out of a desire to change lives without charging for itEvery Saturday morning at 9am sharp a little bit of anarchy breaks out across the country. This being Britain, it happens, naturally enough, in our parks. Not that it’s billed as such. It’s meant to be a 5km run, which is why at Richmond Park in south-west London this morning the grass is carpeted with well over 400 people in sports gear. But it has none of the intensity you’d expect at a track or even on a gym treadmill. One woman tugs balloons, to celebrate her 100th run; others prepare to push baby buggies or keep pace with their dogs. Although supported by the charity Parkrun, this and the 559 other events across the UK set to start in a few minutes are entirely self-organised.What they share is an ethos. Parkruns are free to all, and all are treated equally. No hierarchy intrudes between the hares and the tortoises, the old-timers and the debs. Members volunteer to mark the course or keep time or to aid stragglers. So early this morning, as the weekend still brims with promise, on these hectares of parkland owned by the Queen, a little anarchist world briefly comes into focus. One devoid of government nagging or corporate profiteering, but reliant instead on mutual aid and human kindness.Related: How one community beat the system, and rebuilt their shattered streets | Aditya ChakraborttyRelated: Parkrun makes us fitter, but can it make us happier as well?Related: Meet Britain’s Willy Wonkas: the ideas factory that could save UK industry | Aditya Chakrabortty Continue reading...

Agreement eases uncertainty but president threatens tariffs on Canada if it does not sign up

The economy is doing well but the US is in a weak position to manage the inevitable shockThe US economy is doing well. But the next recession – and there is always another recession – could be very bad.

Two former members of Bank of England’s rate-setting committee give views on UK growth

Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade

The latest monthly Guardian analysis finds the UK economy failing to deliver on wage growth

Senior business leader says effects would be much more serious than UK admitsMany businesses in Germany are still hoping the UK reverses its decision to leave the EU, according to one of the country’s top business leaders, who also warned of the dangers of a no-deal Brexit.“The risk of a hard [no-deal] Brexit is growing by the day,” said Joachim Lang, the head of the Federation of German Industries (BDI), in a wide-ranging interview with the Rheinische Post newspaper. “Every business would do well to prepare for this worst-case scenario.”

Despite predictions of gloom from the Treasury and Bank, the public remains optimisticBefore heading off for his summer break Mark Carney said the risks of a no-deal Brexit were uncomfortably high. Last week Philip Hammond warned the Treasury would take an £80bn hit if negotiations between Britain and the EU failed completely.There is a risk to this latest manifestation of Project Fear. If the public really thinks that in eight months’ time Britain is going to be plunged into the economic equivalent of a nuclear winter, the economy will take a serious hit. Continue reading...

As former Leave-voting constituencies start to waver, the party is now free to act in Britain’s interest and oppose this Tory follyThere is a time-honoured expression for offering something that is not needed: “that’s like taking coals to Newcastle” – the north-east of England, of course, for most of the 20th century having been a centre of working coal mines. More recently, however, the coalfields were so run down that, before the carbon tax was introduced in 2013, we were importing coal from Russia and South America for power stations not that far from Newcastle.The miners were very important in Labour party history. When, in the early postwar years, the European Coal and Steel Community (ECSC) was being formed, the possibility of our joining was peremptorily dismissed by Herbert Morrison, foreign secretary in the Attlee government, with the words “the Durham miners won’t wear it”.Perceptions of the damage that the mere prospect of Brexit is now inflicting appear to be strengthening Continue reading...

The president’s remarks overlook the fact that his tax cuts and protectionism destabilise the very bull market he boasts aboutImpeach me and the stock market gets it. There were unmistakable echoes of a mob boss in a gangster movie when Donald Trump insisted that any such action against him would bring an abrupt end to what is now the longest bull market in history.It is a sign of a backs-to-the-wall mentality at the White House that Trump felt the need to lash out in this way. Presidents usually go out of their way to avoid saying anything that might give Wall Street cause for concern. Not this one. The market would crash, Trump said. Everyone would be very poor. Continue reading...

Jerome Powell says central bank will ‘do whatever it takes’ to maintain strong economyThe Federal Reserve chairman has defended the central bank’s approach of gradually raising interest rates, after direct criticism from Donald Trump.Jerome Powell, who was this week attacked by the president for failing to give him “some help” on the US economy, warned that steadily rising borrowing costs would be required to promote job creation and economic growth. Trump had suggested that a change of course would be better for the country. Continue reading...

Trade row between world’s two biggest economies rumbles on; US central bankers defend Federal Reserve’s independence after Trump criticisms2.05pm BSTMarkets continue to drift as the concerns about the US-China trade rift continue, along with uncertainty about how the problems facing Donald Trump will play out.The FTSE 100 is currently up just 0.17%, Germany’s Dax is up a similar amount while France’s Cac has climbed 0.37%.1.52pm BSTUS durable goods #orders fell 1.7% in July & shipments -0.2%, but weakness due to weak aircraft component.

The oil-rich nation is aware of an urgent need to diversify, but it still has a long way to goOn 2 March 1938, Saudi Arabia was a largely nomadic society with a sideline in the tourism generated by pilgrimages to Mecca. The following day, oil was discovered at Dharam and the country’s prospects were transformed for ever.It took time for the full extent of Saudi Arabia’s crude reserves to become known, not least because in early 1938 the world had other things on its mind. But by the time the second world war was over, it was clear that beneath the desert sands there was an abundance of oil that could be easily brought out of the ground. Cheap Saudi oil was a vital component of the world economy’s long post-war boom and the revenues from petroleum exports paid for roads, bridges, apartment blocks and western-style living standards.Related: Oil giant Aramco's $2tn flotation is still on, says Saudi Arabia Continue reading...

China retaliates as US imposes 25% taxes on another $16bn worth of imports

The number of EU workers coming to the UK is falling. The delay in publishing a white paper is damaging the economy

Countries implement 25% tariffs on $16bn worth of imports on both sides in new salvoThe US and China have escalated their ongoing trade war by implementing 25% tariffs on $16bn worth of imports on both sides, bringing the amount levied to a combined $100bn (£78bn) since July.Beijing began implementing the new tariffs on Thursday, when the US said it would begin collecting extra duties in retaliation for what it claimed were unfair Chinese trade practices.Related: Markets nervous amid new US-China tariffs and Trump's troubles - business live Continue reading...

Those observing Istanbul’s construction boom will not have been surprised by last week’s currency collapse – it’s all based on debtFrom a distance, Esenyurt, a newly built up neighbourhood on the edges of Istanbul, looks a bit like Hong Kong or Dubai, with a bustling downtown of shiny skyscrapers. Upon closer examination, however, you notice that tower after tower stands incomplete, lacking windows or furnishings; others are only half-occupied, their windows dark after nightfall.“In the residential areas, 100% of the construction has stopped,” says Mohamed Karman, a local estate agent, from his small office in the central square of Esenyurt. “Do you know why? The materials. Everything is in dollars, you pay in dollars.”Unless [Turkey] exports from time to time, they run into a crisis. It happens every 10 years.We don’t act on a long-term basis. The longest plan I saw in a Turkish company was two monthsRelated: Feel the earth move: images of Istanbul bend time and space Continue reading...

Key S&P 500 index passes landmark as it goes 3,453 days without major correctionUS stock markets passed another landmark on Wednesday as the S&P 500 recorded its longest rally ever, capping a near decade-long Wall Street boom that has gathered pace over the course of this year.The S&P 500 share index, tracking the 500 biggest public companies in America, closed trading on Wednesday having gone 3,453 days – nearly nine and a half years – without a fall of 20% or more, which is the measure used by some analysts for handing it the status as the longest bull market in US history. Continue reading...

Four key factors that shaped nearly a decade of constantly rising US share pricesThe S&P 500 share index is due to break the record for the longest bull market in US stock market history on Wednesday.

Talk of a fiscal black hole is political hot air but going it alone suddenly looks less attractiveIt is getting on for four years since Scotland voted to remain part of the UK and talk of a second referendum has gone a bit quiet. The latest figures outlining the state of the country’s public finances help explain why.Scotland’s budget deficit – even including a share of revenues from the North Sea – remains high and, at almost 8% of gross domestic product, is four times as big as that for the UK as a whole. Continue reading...

Latest data shows gap between income and spending is four times as much as UK as a wholeScotland ran a narrower deficit last year as a stronger performance from the oil industry boosted revenues, but the gap between government spending and income was nearly four times higher than the UK as a whole.The latest Government Expenditure and Revenue Scotland (Gers) data for Scotland shows that for 2017-18 overall state spending hit £73.4bn compared to tax income of just under £60bn, including oil revenues. That left a deficit for the year of £13.4bn, compared with £13.5bn the year before. Scotland’s deficit was equivalent to 7.9% of GDP, while for the UK as a whole it was 1.9%.Related: Scotland's public finances limit its independence options | Larry ElliottRelated: Sturgeon likely to delay decision on second independence vote Continue reading...

S&P 500 hits new peak ahead of US-China trade talks2.05pm BSTHere is our story on the record breaking bull market run in the US:Related: Wall Street poised to set record for longest rally in history1.48pm BSTWith dollar weakness continuing, even the pound is benefiting. Sterling is now up 0.2% at $1.2925 after its earlier dip.1.46pm BSTThe depth of the financial crisis is one reason why the recovery has been record breaking for markets, suggests Will Hobbs, Head of Investment Strategy at Barclays Smart Investor:

While some begrudge a work reunion, the bankers’ model remains the same: picking up pennies in front of a steamrollerWill it be slippery nipples all round? Harvey Wallbangers, maybe, or possibly even a nice Banker’s Lunch (vodka, vermouth, orange liqueur and grapefruit juice). Whatever is on the drinks menu, next month’s 10-year reunion of former Lehman Brothers employees should be quite a night.On 15 September 2008, in the memorable image from the film The Big Short, the fatal Jenga brick of destiny slipped out of place and the whole global financial tower teetered on the edge of collapse. Lehman Brothers was finished, and the rest of us very nearly were too.Buy-backs starve firms of useful investment. If you want to know why productivity and pay remain so low, look hereRelated: In another financial crisis we would have far less wiggle room | Larry Elliott Continue reading...

Strong economies tend to boost incumbents yet the Democrats are riding high in midterm election polls. Why?The US economy is growing, inflation has finally hit the US Federal Reserve’s 2% target and unemployment is quite low – and at an all-time low for African-Americans and Hispanics. For the first time in memory, there are more job openings listed by US companies than there are unemployed people. Such conditions usually foreshadow rising real (inflation-adjusted) wages, which would indicate that American workers, many of whom were left behind in the anaemic post-crisis recovery, might finally reap benefits from the strong economy.Electoral models predict a strong economy favours the party in power and a weak economy dooms it to crushing losses. And yet, with the economy in its best condition in more than a decade, most polls show a substantial Democratic party lead in the run-up to the midterm congressional elections in November. Moreover, most political pundits predict the Democrats will take back control of the House of Representatives. And some even foresee a “blue wave” in which Democrats also retake the Senate, despite having to defend far more seats than the Republicans. In several recent special elections, Republicans have held on by far narrower margins than in past elections for the same congressional seats.Related: Can Turkey rewrite the rulebook for crises in emerging markets?Midterm elections are almost always a referendum on the president and his policies Continue reading...

The Maduro administration has taken one of the world’s big oil exporters to the brink of collapse. Donald Trump wants to tip it over the edgeA century ago, John Maynard Keynes recognised the deadly threat inflation posed to a body politic. He wrote: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” It is a lesson that Venezuela’s Nicolás Maduro has yet to learn. Yearly price rises are predicted to hit 1,000,000%. Venezuela’s situation, says the IMF, is not as bad as that faced by Germany in 1923 or Zimbabwe in the 2000s. But it’s not far off. The economy is set to shrink by a fifth. Jobless Venezuelans are leaving in droves for neighbouring countries – only to be greeted by mob violence over the borders.Keynes warned that the ruling class could be overthrown. The irony is that it is Venezuela’s revolutionaries who risk being toppled in nightmarish scenes. Mr Maduro, heir to Hugo Chávez’s populist politics, narrowly escaped an assassination attempt this month. Chávez’s Bolivarian revolution had its roots in social justice, and tapped the world’s biggest oil reserves to aid the poor. Mr Maduro took over just as inflation took off and before oil prices crashed. He failed to tackle an incipient crisis. Instead, he oversaw Venezuela’s descent into economic and social catastrophe. Security forces, who are suspected of killing hundreds of demonstrators, enjoy immunity from prosecution. In June the United Nations warned that the rule of law is “virtually absent” in the country. Continue reading...

A £2bn public finances surplus has fallen to Philip Hammond so he could yet boost the NHSPhilip Hammond just got lucky. What was shaping up to be an extremely tricky budget for the chancellor all of a sudden looks quite a lot easier. July is normally a good month for the public finances because it is a time when tax receipts come rolling in to the exchequer, but the size of the surplus – £2bn – has been a pleasant surprise.Not since Gordon Brown was in his frugal phase at the Treasury during Tony Blair’s first Labour administration 18 years ago has there been a July as good.Related: Squalid prisons are just the start. The entire justice system is in meltdown | Polly Toynbee Continue reading...

Philip Hammond given more scope to increase NHS spending in autumn budgetBritain has recorded the biggest July budget surplus since the millennium, giving a boost to Philip Hammond as he considers ways to pay for greater NHS spending in the autumn budget.The Office for National Statistics said public sector net borrowing, excluding the state-owned banks, went into surplus for July by £2bn, meaning the government received more in tax income than was spent on public services. Continue reading...

EU-imposed austerity is finally over for pauperised Greece – and it’s time for a rethink of the whole European projectGreece has entered a new, “normal” phase now that the formal lending agreement with the troika (International Monetary Fund, European Central Bank, European commission) has come to an end. But after eight years of austerity, the truth is that no one can afford rose-tinted glasses. The crisis has cost Greece 25% of its GDP – unprecedented for any European nation during peace time – the unemployment rate sits at almost 20%, even after hundreds of thousands of people have migrated, and national debt is about 180%.Even without its lending arrangements in place, Greece is not totally free from the creditors – a series of audits will ensure that the continuing reforms will go ahead to ensure a “healthy” economy.Related: Greece's bailout is finally at an end – but has been a failure | Larry Elliott Continue reading...

UK foreign secretary will urge US president to tighten rules on online election advertisingJeremy Hunt has urged the EU to stand shoulder to shoulder with the US administration by imposing more comprehensive sanctions against Russia.In his first speech since his appointment as foreign secretary, Hunt renewed the British attack on Russian efforts to undermine liberal democracies, saying Vladimir Putin had made the world “a more dangerous place”, and that, after a chemical weapons attack in England, the EU should apply more pressure to protect western democracy from Russian interference and ensure Russia sticks to international rules.Related: Is free trade always the answer? Continue reading...

The UK increasing overseas sales to 35% of GDP is a nice idea but too few British firms are onsideThe timing of the government’s latest export drive is far from accidental. With Theresa May intent on showing Brussels that Britain could not just survive but thrive in the event of a hard Brexit, Whitehall has come up with a plan for increasing the amount of goods and services sold overseas.This is by no means the first attempt to broaden the horizons of UK plc. Back in 2015, the aim was to double exports to £1tn a year by 2020. That always looked a stretch and the target was dropped by the international trade secretary, Liam Fox, early last year. Continue reading...

Trade secretary hopes package of measures will transform UK into an ‘exporting superpower’Liam Fox is to unveil a plan intended to increase Britain’s exports after Brexit to 35% of GDP as his cabinet counterpart Dominic Raab heads to Brussels for the latest round of divorce talks with the European Union.The international trade secretary believes there are 400,000 UK businesses that could export but do not, and will try to target them with better loans, guarantees and support – and ask businesses to spell out what barriers to trade they face.Related: Liam Fox says no-deal Brexit now more likely than an agreementRelated: The Guardian view on Brexit and trade: the WTO is not a safety net | Editorial Continue reading...

Caracas shears five zeros from bolívar, which will be pegged to new cryptocurrencyVenezuela moved to shore up its crumbling economy on Monday, devaluing its currency and preparing to raise the minimum wage by more than 3,000% in what the country’s president, Nicolás Maduro, declared a visionary bid to tame rampant hyperinflation.

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Nicolás Maduro’s emergency package to tackle the problem looks doomed to failCountries suffering from an inflationary problem fall into three categories: the ones that have a sharply rising cost of living; the ones gripped by hyperinflation; and the ones where things are so bad comparisons are made with Germany in 1923. With the International Monetary Fund predicting that inflation will hit 1,000,000% by the end of the year, Venezuela falls into the third category.It wasn’t always this way. Venezuela has the highest oil reserves in the world and could once boast of being one of the richest countries in Latin America. Poverty levels were more than halved under the former president, Hugo Chávez, and there was bountiful public investment in health and education.Related: 14m bolivars for a chicken: Venezuela hyperinflation explained Continue reading...

As South American country faces soaraway prices, what is hyperinflation and why is it bad for the economy?Venezuela is introducing economic reforms including new banknotes that lop five zeros off its fast-depreciating currency as the country battles hyperinflation.Banks will close on Monday as they prepare to release the new “sovereign bolívar” amid warnings from International Monetary Fund economists that Venezuela’s inflation rate could exceed 1,000,000% this year.Related: Venezuela prepares to devalue currency, amid fears it may worsen economic crisisRelated: Venezuela's plan to fight runaway inflation lacks key ingredients | Larry Elliott Continue reading...

Greece is now able to raise money in markets after €289bn bailout ends

‘Let the market decide’ has been the mantra for decades. This dysfunction and inequality is the inevitable resultA new report from the Economic Policy Institute calls attention to the hardy perennial of how much America’s corporate titans make: bosses of the top 350 firms made an average of $18.9m in 2017. That’s a ratio of 312-1 over the median worker in their industries. Big bucks to be sure. And a big change since 1965, when the ratio was just 20-1. But what does it mean? And if there’s a problem, what is it, exactly?What it means, as the EPI economists carefully document, is that the top US corporate chiefs are paid overwhelmingly with stock options, and their income fluctuates with the market. About 80% of the pay packet is in stocks, and the rise of 17% in 2017 after two flat years surely suggests that the top CEOs (not unreasonably) sensed the market peaked last year. So they cashed in. On the other 20% of the pay packets, no gains occurred.Related: Crashed: How a Decade of Financial Crises Changed the World – reviewRelated: Inequality gap widens as 42 people hold same wealth as 3.7bn poorest Continue reading...

‘The worst is over’ after eight very difficult years for the country, commissioner saysGreece has turned the page to become “a normal” member of the single currency, European Union authorities in Brussels declared as the country finally exited its eight-year bailout programme.Its three bailouts during the eurozone crisis totalled €288.7bn (£258bn) – the world’s biggest-ever financial rescue. During that time, as the crisis threatened to lead to the nation’s ejection from the single currency – “Grexit” – Greece has had four governments and endured one of the worst recessions in economic history.Related: Greece's bailout is finally at an end – but has been a failure | Larry ElliottYou did it! Congratulations to Greece and its people on ending the programme of financial assistance. With huge efforts and European solidarity you seized the day. Continue reading...

Milestone unlikely to be celebrated by many households feeling effects of crippling debt repayments

Britain’s growth model is unsustainable, and has created scandalous levels of inequality – we should rely more on production, not consumptionThe British growth model is well and truly broken. If any more evidence for this was needed, it came from figures last month showing that households had become net borrowers for the first time since records began in 1987. They took out almost £80bn in loans last year, the highest amount in 10 years. Only £37bn was deposited in banks. This has echoes of the pre-2008 boom period, and we all know how that ended.The Office for National Statistics also reported that reliance on short-term unsecured loans, such as credit cards and payday loans, had exceeded £200bn: a record high. Nine out of 10 new car purchases are made using hire purchase or some kind of similar arrangement. Rather than serve as a corrective, the financial crisis and its aftermath has just reaffirmed that we remain addicted to this debt-fuelled route to growth.Related: Pay growth slows to weakest in a year despite fall in joblessness Continue reading...

Data shows sector starved of investment and losing ground as Brexit uncertainty persistsBritain’s manufacturing industry has fallen to ninth in the world behind France, reversing a recovery in its performance since the financial crash.The UK’s total manufacturing output stayed ahead of Brazil and Indonesia but slipped below France and remained well adrift of Germany in fourth position and Italy in seventh at the end of 2016.

The strategy of austerity will have long-term consequences throughout EuropeAfter eight years, Greece will on Monday be deemed strong enough to stand on its own feet. The international bailout programme that has provided Athens with emergency financial support will come to an end. Aside from the tough budget rules in place for the next decade or more, Greeks can wave goodbye to the troika – the officials from the International Monetary Fund, the European Central Bank and the European Union – that has in effect been running the country since 2010.Beware the hype that trumpets this as a great success story, a tribute to solidarity and a commonsense approach that has restored economic stability and prevented Greece from being the first country to leave the euro. Nothing could be further from the truth. Continue reading...

Bosses now get paid 300 times what workers do. In the 60s, that ratio was far lower, and growth and investment were higherDefenders of the astronomical amounts routinely being trousered by leading executives have a stock response to critics who say that such rewards are excessive. Chief executives have to be paid the going rate. Without the right incentives, these alpha males (and occasionally alpha females) would take their talents elsewhere and everyone would lose. It’s a global marketplace out there. The market rate for talent has to be paid. Having a pop at these titans of industry over their remuneration packages is simply the politics of envy.Interestingly, the same explanation is used to justify the nugatory pay awards executives hand out to their staff. When it comes to people lower down the pay s cale, the message is that jobs can always be outsourced overseas if the workers get too bolshie about pay. Continue reading...

Fewer children will collect GCSEs in arts subjects this week, as education reforms stifle a sector also hit by petty regulationsThis week thousands of young people will learn how they performed in their GCSEs. One thing we already know is that the number of GCSE music entries is down over the last five years by 8%.Worse, performing and expressive arts entries have slumped by 26% over the period, while the number sitting exams in media, film and TV studies has dropped by 22% and drama entries are down 14%. Continue reading...

Trump trade tariffs and higher borrowing costs are causing problems from Turkey to ChinaDonald Trump’s trade tariffs are causing tremors in global markets. Emerging economies from Turkey to China are finding it more expensive to export to the US. Investors who put their money in safe havens after the 2012 Greek crisis are nervous again. The FTSE Emerging Index of stocks in the developing world tumbled last week, taking the decline in its value since the beginning of the year to more than 20%.It is not only the US president troubling investors though. The country’s central bank, the Federal Reserve, has quadrupled interest rates in the last couple of years. Countries that borrowed heavily in dollars to fund their growth face the prospect of paying a heavy price in extra interest payments. It is a crippling bill that has already forced Argentina to seek help from the International Monetary Fund. Others could follow: Continue reading...

This week’s currency crisis has prompted a flood of overseas buyers seeking bargainsProperty investors have been flocking to Turkey this week in a bid to grab houses and apartments that have in some cases dropped from £55,000 a month ago to below £37,000 now.The highly-publicised collapse in the Turkish lira may have been a disaster for the country – and any British expat who bought there in the last two years – but it has been described as a bonanza for those holding US dollars, pounds or euros. Continue reading...

Turkish currency falls 5% at the end of a tumultuous week; European stocks drop after Turkish court rejects US pastor’s appeal for release2.46pm BSTThe Turkish lira has taken another battering today, falling 5% to 6.1 to the dollar (it lost nearly 7% at one stage) and the Turkish stock market is down 1%.It has been a tumultuous week that saw the lira go into meltdown on Monday when it hit a record low of 7.2 against the dollar and the panic spread to other emerging markets. A pledge by Turkey’s central bank to provide liquidity to banks and other measures, a pledge from Qatar to provide $15bn in loans to Turkey, and reassuring words from the finance minister yesterday helped calm nerves.1.41pm BSTEven so, Schmieding reckons that the impact on the eurozone will be very limited. He says:Exports: The eurozone earns 0.57% of its GDP by selling goods to Turkey. Even a 20% fall in exports to Turkey would not subtract more than 0.1ppt from annual Eurozone GDP growth. As global demand remains healthy, eurozone firms could likely contain the damage further by switching to other markets for some of these affected goods with only modest reductions in their selling prices.1.39pm BSTHolger Schmieding, economist at Germany’s Berenberg, says the bank has lowered its year-end forecasts for the euro to $1.17 from $1.21, due to the Turkey crisis.Turkey is no small fry. It contributes 1% to global GDP. Beyond the obvious geopolitical concerns, a major Turkish recession would pose a significant challenge for financial markets and for other economies.Remembering the tremors which Turkey’s smaller neighbour Greece once sent through European and global markets, investors are understandably nervous. Adding to concerns about Italy’s 2019 budget and Brexit uncertainty, the noise from Turkey could delay the rebound in eurozone business confidence and growth for a few more months despite the easing of US-EU trade tensions.1.24pm BSTOver in the US, Donald Trump has revealed that he has asked the Securities and Exchange Commission to look into whether American companies should report earnings on a half-year, rather than a quarterly basis.In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. “Stop quarterly reporting & go to a six month system,” said one. That would allow greater flexibility & save money. I have asked the SEC to study!1.21pm BSTThe Turkish lira is still down 5.4% on the day, with one dollar buying 6.14 lira. The Turkish stock market has turned positive, however, gaining 0.6%.Other emerging markets currencies are also under pressure, with the Mexian peso down 0.7% and the South African rand losing 0.9%.1.18pm BSTEuropean stock markets have turned negative, after a Turkish court rejected the US pastor Andrew Brunson’s appeal for release.11.55am BSTMichael Hewson, chief market analyst at CMC Markets UK, has tweeted:If talk of an S&P downgrade of Turkey priced in - surely Turkish banks downgrade will follow soon after if downgrade occurs $TRYA $15bn rescue package from Qatar, and a limited package of exchange controls in limiting banks’ ability to take out short positions has bought the Turkish lira some brief respite in the last few days, but let’s not kid ourselves here, unless president Erdogan takes steps to restore confidence in his stewardship of the Turkish economy then we could well see the lira come under further pressure.The US doesn’t appear in any mood to relieve the pressure on the Turkish government in securing the release of their pastor, if recent comments from vice President Mike Pence, and Treasury secretary Steve Mnuchin are any guide. President Erdogan may be able to defray some of the risks to the Turkish economy by trying to improving his ties with Germany and Russia, but if the US really wanted to turn the screws it’s unlikely that these countries would be able to do much about it.11.46am BSTOne currency trader told Reuters that the weakness of the lira was driven by the “new US sanctions threat and the S&P decision, with position-closing in markets ahead of the public holiday”.Standard & Poor’s is expected to downgrade Turkey’s sovereign credit rating after markets close today. Next week, the Turkish markets will be closed for Eid al-Adha, the Festival of Sacrifice, from Tuesday until Friday.11.38am BSTWilliam Jackson of Capital Economics said:There has been no sign that the central bank will be allowed to raise interest rates significantly and return rates to positive territory. Similarly, there has been no improvement in relations with the US, and additional sanctions may be on the horizon.11.37am BSTThe Turkish lira is under pressure again, falling nearly 7% against the dollar at one stage to 6.24. It is now trading at 6.04, down 4% on the day.The currency has lost almost 40% against the dollar this year, hit by a diplomatic row with the US and and investor concerns about the country’s financial policies and its foreign-currency debts. The independence of the Turkish central bank and its finance minister have been called into question. The central bank is refusing to raise interest rates to curb inflation, with Turkish president Erdoğan opposed to rate hikes.11.28am BSTAfter nearly nine years of financial crises and austerity, Greece is about to come out of its third bailout programme – on Monday, at midnight. Greece borrowed more than €288bn from international creditors in the biggest bailout in history.Greece’s finance minister, Euclid Tsakalotos, said earlier this week that Turkey’s woes would not affect Greece’s exit from the bailout. He said:A clean exit is based on the following: the Eurogroup agreement on Greece’s debt management, and the cash buffer the government has created which guarantees that the public sector’s funding needs will be met in the next two or three years.Therefore, the Greek government’s plans are not affected by short-term turmoil in the markets. On 21 August, Greece is turning the page, and this is final.Related: Greek bailout drama 'in last throes' but the hardship is not over yet11.22am BSTAccording to the Deutsche Bank economist Oliver Harvey, the UK, Germany and the US have lent the most to Turkey, says Ed Conway, economics editor at the Times. We are trying to get hold of the note...Contrary to what you might have read elsewhere, it’s not Spain/Italy who are most exposed to financial fallout in Turkey but the UK. Chart from Oliver Harvey at DB. More on this in my @thetimes column today: https://t.co/dgqwRyBHxg pic.twitter.com/ep3z2GqsnE11.12am BSTTurkish president Erdoğan’s administration has been adamant that it won’t have to seek a bailout from the International Monetary Fund. Qatar pledged about $15bn in loans on Wednesday but provided few details.10.57am BSTTurkey and its companies face repayments of nearly $3.8bn on foreign currency bonds in October, according to Société Générale.The country’s currency woes has sparked worries about Turkey’s external debts and the ability of its firms and banks to repay them. For companies, the cost of servicing their foreign borrowings has risen by a quarter in the past two months, due to the sharp fall in the lira.Turkey’s external financing requirements are large (IMF estimates around $250bn per year). It has the highest foreign-exchange-denominated debt in emerging markets and short-term external debt of $180bn and total external debt of $460bn.Principal and interest payments should be close watched to year-end – it is 25% more costly for the corporate sector to repay their obligations compared to June given FX depreciation.How will Turkey roll over existing debt? Refinancing via the bond market could be challenging.10.13am BSTInflation in the eurozone has been confirmed at 2.1% in July – above the European Central Bank’s target of 2%. The annual rate rose from 2% in June, pushed up by higher energy costs, according to the European Union’s statistics office Eurostat.This means the ECB can push ahead with plans to end its bond purchasing programme by the end of the year, and possibly raise interest rates next year.9.23am BSTMohamed El-Erian, chief economic adviser at Allianz, the parent of Pimco where he served as chief executive, and the former chairman of Barack Obama’s Global Development Council, writes: Can Turkey rewrite the rulebook for crises in emerging markets? By rejecting the conventional approach, Erdoğan risks greater trouble – and not just for Turkey.Whether by accident or design, Turkey is trying to rewrite the chapter on crisis management in the emerging-market playbook. Rather than opting for interest-rate hikes and an external funding anchor to support domestic policy adjustments, the government has adopted a mix of less direct and more partial measures – and this at a time when Turkey is in the midst of an escalating tariff tit-for-tat with the US, as well as operating in a more fluid global economy. How all this plays out is important not only for Turkey, but also for other emerging economies that already have had to cope with waves of financial contagion.The initial phases of Turkey’s crisis were a replay of past emerging-market currency crises. A mix of domestic and external events – an over-stretched credit-led growth strategy; concerns about the central bank’s policy autonomy and effectiveness; and a less hospitable global liquidity environment, owing in part to rising US interest rates – destabilised the foreign-exchange market.Related: Can Turkey rewrite the rulebook for crises in emerging markets?9.05am BSTThe euro is rising for a second day, heading towards $1.14, after coming under pressure on concerns over the exposure of major European banks to Turkey, after the lira went into meltdown.8.45am BSTThere is a sense of relief in financial markets today, following the news that Beijing will resume trade talks with Washington next week, although at a lower level than previously. It is the first round of trade talks since June and offers some hope to those worried about the impact of the tit-for-tat trade war on the world economy.Lukman Otunuga, research analyst at FXTM, said:

By rejecting the conventional approach, Erdoğan risks greater trouble – and not just for TurkeyWhether by accident or design, Turkey is trying to rewrite the chapter on crisis management in the emerging-market playbook. Rather than opting for interest-rate hikes and an external funding anchor to support domestic policy adjustments, the government has adopted a mix of less direct and more partial measures – and this at a time when Turkey is in the midst of an escalating tariff tit-for-tat with the US, as well as operating in a more fluid global economy. How all this plays out is important not only for Turkey, but also for other emerging economies that already have had to cope with waves of financial contagion.The initial phases of Turkey’s crisis were a replay of past emerging-market currency crises. A mix of domestic and external events – an over-stretched credit-led growth strategy; concerns about the central bank’s policy autonomy and effectiveness; and a less hospitable global liquidity environment, owing in part to rising US interest rates – destabilised the foreign-exchange market.Related: Turkey buys time before day of IMF reckoning Continue reading...