Beleaguered high streets cheered by rise but long-term trend spells more shop closures and job lossesEngland’s extended World Cup run and the summer sunshine gave an unexpected lift to retail sales in July as consumers spent heavily on supermarket food and drink.Heavy discounting by clothing stores also brought shoppers back to the high street to reverse a decline in sales in June.Maplin, Toys R Us and Jacques Vert have all collapsed in recent months, but a raft of retailers and restaurant groups are facing financial problems and are trying to close stores or negotiate rent cuts. Continue reading...

Main elements of crisis remain unaddressed, with eventual bailout most probable outcomeUntil reports came on Thursday night that the US was preparing to impose more sanctions, the Turkish government had had a decent few days. The currency crisis, which threatened to become chaotic on Monday, had improved. The lira had almost returned to its level of a week ago. During that time, the country had increased liquidity in its banking system, unveiled $15bn (£11.8bn) of direct investment from Qatar, announced a clampdown on short-sellers and on Thursday its finance minister, Berat Albayrak, talked the language of fiscal discipline on a phone call with investors. There have been worse fightbacks.Yet there is a big difference between buying time and turning a corner. Turkey has merely achieved the former. All the main elements of the crisis remain unaddressed. The Qatari money was pledged at impressive speed but the external funding requirement is enormous – about $220bn during the next 12 months, economists estimate.Related: Lira rallies as Turkey pledges spending cuts to avoid IMF bailout Continue reading...

All the day’s economic and financial news, including the latest on the Turkish currency crisis that has spooked investors

Finance minister out to convince investors but threat of fresh US sanctions loomsTurkey’s finance minister sparked a recovery in the lira after he addressed thousands of international investors, pledging to protect beleaguered local banks and cut public spending to prevent the country defaulting on its loans.Berat Albayrak, who has faced criticism for failing to tackle the country’s growing financial crisis, spoke to around 6,000 investors on a conference call to rebuff concerns that a funding squeeze on Turkey’s banks and a damaging trade war with the US would force him to seek a rescue bailout from the International Monetary Fund (IMF).

Currency rises from record low against US dollar but investors remain anxious at lack of interest rate riseTurkey’s lira continued its recovery on Thursday, ahead of a crucial conference call between the country’s finance minister and international investors.It rose 2.5% in early trading, with one dollar buying 5.8 lira. A diplomatic spat with the US helped send the lira into a tailspin last week and it hit a record low of 7.2 to the dollar on Monday, sending tremors through emerging markets. However, the lira remains about 20% below where it was a month ago.Related: Turkish financial crisis: Lira recovers as Ankara tries to calm markets - live updates Continue reading...

New round of talks to take place in Washington ahead of threatened $200bn worth of tariffs on Chinese goodsA Chinese trade delegation will visit the US this month to kick off a new round of talks, the first since negotiations broke down two months ago.China’s ministry of commerce said the US had invited a delegation, led by vice-commerce minister Wang Shouwen, to meet a group led by US Treasury undersecretary, David Malpass.Related: Turkish financial crisis: Lira recovers as Ankara tries to calm markets - live updatesOur Country was built on Tariffs, and Tariffs are now leading us to great new Trade Deals - as opposed to the horrible and unfair Trade Deals that I inherited as your President. Other Countries should not be allowed to come in and steal the wealth of our great U.S.A. No longer! Continue reading...

Anglo-Saxon capitalism’s drive to maximise profits in the short term won’t save the planet. Perhaps the Chinese model can?This summer’s heatwave has provided a glimpse of the future, and it is not a pretty one. On current trends, the years to come will see rising temperatures, droughts, a fight to feed a growing population, and a race against time to reduce dependency on fossil fuels.The struggle to combat climate change brings out the best and worst of capitalism. Decarbonisation of the economy requires alternatives for coal and cars that run on diesel, and that plays to capitalism’s strengths. Innovation is what capitalism is all about, and there has been staggeringly rapid progress in developing clean alternatives to coal, oil and gas. The cost of producing solar- and wind-powered electricity has collapsed. Great advances are also being made in battery technology, which is vital for the new generation of electricity-powered vehicles. Humans are endlessly creative. In the end, they will crack climate change.Related: Extreme temperatures 'especially likely for next four years'Related: Climate change denial won’t even benefit oil companies soon | Phil McDuff Continue reading...

Accountable Capitalism Act would bring about ‘fundamental change’, redistribute wealth and give more power to workersElizabeth Warren, the Massachusetts senator tipped as a Democratic presidential candidate in 2020, has unveiled new plans for legislation aimed at reining in big corporations, redistributing wealth, and giving workers and local communities a bigger say.Related: 'We made history': Vermont Democrats nominate US's first transgender candidate for governorOver the last year, corporate profits have soared while average wages for Americans haven’t budged. It’s been the same sad story for decades. Today I’m introducing a new bill to help return to the time when American companies & workers did well together: https://t.co/9isNoIyzoW Continue reading...

Higher costs at the pump add to squeeze on household incomes after months of falling wages growthHigher fuel prices in July pushed up the rate of inflation for the first time this year to put an extra squeeze on household incomes following several months of falling wages growth.The consumer prices index (CPI) rose at an annual rate of 2.5% last month after holding at 2.4% in the previous three months, following a steep rise in annual energy price growth from 8.7% in June to 9.3%. Continue reading...

Call for freeze on train fare increases after year of mass cancellations and strikesRail fares will increase by up to another 3.2% in January, the government has confirmed, with the cost of some season tickets to rise by hundreds of pounds.The figure is below the 3.6% increase to regulated fares in January this year, the steepest in five years, but continues the trend of fare increases far outstripping average wage rises.Related: Fare rises enrage rail commuters 'in this terrible mess'Studies have repeatedly found weekday commuter fares to be significantly higher in Britain than elsewhere in Europe.Related: Top pay in UK up by 11% as workers’ wages fail to match inflation Continue reading...

Economic insecurity means that real unemployment is double that which is officially recorded. A new institutional framework to deliver and maintain full employment is neededBritain’s employment problem would on the surface appear to have been solved. Officially just one in 25 Britons are now unemployed, the lowest rate since the winter of 1974-75. Younger workers look to be finding jobs more easily than ever. Older workers are staying in employment for longer. Although the economy has created over 1m jobs since 2010, real wage growth remains flat. Britain is a jobs factory but for insecure, low-paid work. More people are employed, but on static real – that is, inflation-adjusted – wages. Real wage growth averaged 2.9% in the 1970s and 1980s, 1.5% in the 1990s, 1.2% in the 2000s. It is zero today. This is not normal, yet the authorities are determined to believe it is so.The Bank of England is in denial. Wage growth is the clearest signal as to whether monetary policy is tighter or looser than the economy can sustain. Instead of focusing on that, the Bank concentrated on the record low employment and raised interest rates this month, putting pressure on indebted households. The Bank has been criticised for “clear signs of ‘groupthink’ among its leadership”. It seems to be still suffering from it. But the Bank is not to blame. The guilty are in power. The Conservative party’s achievement has been to strip away bargaining power from employees and have them work on the terms offered by employers. The result has been widespread use of zero-hours contracts, self-employment and other forms of underemployment. Continue reading...

Fears over emerging markets’ currencies ease slightly amid financial crisis in TurkeyThe Turkish lira recovered some of its losses on Tuesday, with the country’s finance minister pledging to take steps to support the under-pressure currency.There was some respite for the lira after days of heavy losses. The currency rose 5% to about 6.5 to the dollar on Tuesday afternoon, after slumping 20% in the past four working days. The country’s central bank stepped in on Monday by pledging to provide liquidity to its banking sector.

Jobless rate declines to 4% in the three months to June, the lowest since the winter of 1975Pay growth in Britain has slowed to its weakest in almost a year despite a fall in the jobless rate to a fresh 43-year low and the biggest annual drop in workers from the EU since modern records began more than two decades ago.Figures from the Office for National Statistics (ONS) showed wage inflation cooling in the second quarter of 2018 even though unemployment fell from 4.2% to 4.0% – its lowest level since the winter of 1974-5.Related: High street job losses mount with Homebase next in line for closures Continue reading...

Germany beats forecasts in the second quarter, outpacing the UK and FranceThe eurozone economy has shrugged off growing trade tensions to grow faster than previously estimated in the three months to the end of June, as Germany and the Netherlands beat expectations.GDP growth in the eurozone was revised higher from 0.3% to 0.4% between April and June, matching the rate in the first quarter, said Eurostat, the EU’s statistical office. GDP was also up 0.4% in the 28 EU countries. Continue reading...

Peso and rand are knock-on casualties of currency slide after lira falls 8% against dollarA fresh plunge in the Turkish lira sent tremors through global currency markets on Monday, amid fears that the failure of Recep Tayyip Erdoğan’s government to tackle its worsening financial crisis would have a domino effect on other vulnerable countries.Argentina’s central bank raised its key interest rate by five percentage points to 45% after a fall in the peso and the South African rand was also hit in a day of turbulence that saw the lira fall 8% against the ­dollar.

Refusing standard monetary medicine means following Argentina is logical conclusionThere is not an easy way for Turkey to escape its financial crisis but three measures that might contain the coming pain would be these. First, raise interest rates to try to put a floor under the plunging lira. Second, tone down the bellicose rhetoric and certainly don’t pick new fights with the US. Third, call the International Monetary Fund.None of those actions arrived on Monday. The central bank lowered reserve requirements for banks, which may improve liquidity in the financial system for a short period but it kept the official interest rate at 17.5%. International investors knew how to read that decision. With inflation heading rapidly towards 20%-plus, it was a signal that Turkey is still refusing standard monetary medicine.Related: Lira crisis: action by Turkey's central bank fails to quell contagion fearsRelated: How serious is Turkey's lira crisis and what are the implications?Bain, you would think, would want to keep Wood in harness in some role Continue reading...

Thatcherite ideology, incompetence and the abolition of the Audit Commission have all contributed to local government failures, readers suggest. But there’s good news from the London borough of HaringeyAditya Chakrabortty’s excellent piece (The councils that embraced austerity will cost us all dear, 13 August) builds on an earlier one by Patrick Butler, who pointed out in 2012: “Outsourcing a local authority in its entirety is a long-held Tory municipal fantasy, first articulated by Margaret Thatcher’s local government minister Nick Ridley in the late 1980s.” Large Tory-run authorities in Cornwall, Suffolk and Barnet had “embarked on their own high-profile versions of the Ridley model, claiming that impoverishment gave them no choice but to pursue large-scale privatisation”.However, the idea of smashing up and reshaping the public sector had its roots in Tory thinking well before Cameron and May or even the late 1980s. Ridley, appointed by Thatcher “to head a policy group on the nationalised industries” in 1975, had chaired a similar group under Ted Heath in the late 1960s which concluded that there was “a very strong case for embarking on a course of gradually dismantling the public sector”.

Interest rates | Poetry in newspapers | Minister spotting | Cat namesSome 35 years ago I was a researcher at London Business School, sharing our sole computer with the renowned (or infamous) Economic Forecasting Unit, led by Terry, later Lord, Burns, before he was appropriated by Margaret Thatcher to advise the government. I well recall the announcement (though not the reason for it) by an EFU colleague: “We will never see single interest rates again.” If there is one observation I have made since, it is that all worldly things are subject to sudden, radical upheaval (Interest rate ‘will remain low for next 20 years’, 10 August).

The options as the country’s economic growth displays the classic signs of overheatingBad and getting worse by the day. Over the past five years, Turkey’s growth has been virtually keeping pace with that of China and India but it is now displaying the classic signs of overheating: a large trade deficit, a construction boom and soaring debt. Financial markets have taken fright at inflation, rising at an annual rate of more than 15%, and have been selling the Turkish lira, which is down by 45% against the US dollar since the start of the year.Related: Lira crisis: action by Turkey's central bank fails to quell contagion fears Continue reading...

Euro falls to one-year low as investors worry lira’s crash could infect European markets

As Brexit talks continue, we answer the key questions on the free flow of goodsAs concerns over Donald Trump’s import tariffs intensify and ministers renegotiate Britain’s trading relationship with Europe, the postwar consensus towards ever-closer economic cooperation between wealthy nations is being unpicked. Continue reading...

Analysis by New Economics Foundation says lost jobs are a £1.5bn cost to GDPThe DIY chain Homebase is expected to reveal the closure of up to 80 stores this week as job losses from Britain’s high streets total more than 30,000.

Rise in hotels and restaurants is more than offset by falls elsewhere, says VisaSpending in the shops fell in July according to Visa, in another blow for Britain’s struggling high streets.The credit card company, which accounts for £1 in every £3 spent in the UK, said that despite hopes that the heatwave could lift retailers, spending was down 0.9% in July compared with the same month a year ago.Related: UK retailers benefit from England World Cup run and heatwave Continue reading...

Erdoğan accuses foreign interests of waging trade war after lira goes into freefallGlobal markets are braced for another hectic day of trading amid Turkey’s unfolding economic crisis after the country’s currency, the lira, continued its fall on Monday.Related: Turkey financial crisis: lira plunges again amid contagion fearsRelated: Turkey's economic crisis deepens as Trump doubles tariffsRelated: Erdoğan gets backing to strengthen his autocratic grip on Turkey Continue reading...

As the currency plunges holidays in Turkey get cheaper but markets fear contagionTurkey’s currency is in freefall, its exports face US sanctions, inflation is rising but its president is defiant. So what’s going on in the country with 80 million inhabitants that is a key Nato ally?What has happened to the currency? The lira fell by one fifth against the dollar last week alone. But even before the current crisis, the lira was the world’s worst performing currency, dropping by almost 50% against the dollar in the past 12 months.Related: Global markets braced for hectic trading as Turkish crisis unfoldsRelated: Turkey's crisis could widen, and its options are running out Continue reading...

Final €15bn loan brings new era, says Tsipras, though IMF views GDP growth forecasts as ‘very ambitious’After nearly nine crisis-filled years, relentless austerity and four governments, Greece will next week exit its third bailout programme – in contrast to the economic crisis enveloping Turkey.On 20 August, at midnight, Athens will reclaim its sovereignty in what the prime minister, Alexis Tsipras, has called a transcendent moment for the debt-stricken nation.Related: Greece relaxes capital controls to prove worst of turmoil is overLast year, 135,000 people filed court papers handing over real estate to the stateRelated: Creditors agree terms to disburse Greece's €8.5bn bailout funds Continue reading...

Erdoğan or the central bank have days to prevent a tsunami of selling and a collapse of the liraThe financial crisis a decade ago struck at the very heart of the global economy – the strategically important banks in the United States and Europe. But it took time to arrive. The “big one” of 2008 followed a series of mini-crises elsewhere in the world.Over a 15-year period, problems in the emerging markets worked their way to the heart of the international system. Mexico, Thailand, Indonesia, South Korea, Brazil, Russia and Argentina were all warning signs that unchaining global finance would eventually prove costly to the rich developed countries as well. Unfortunately, the warning signs were ignored. Continue reading...

Having complained that no one took no-deal seriously, the ideologues now seem unhappy that it is getting close scrutinyIt couldn’t happen to a nicer bunch of fantasists. Worried that the government was not making enough preparations for the possibility of no deal being reached in the “negotiations” with the other 27 members of the EU, the voluble Brexiters within and without the cabinet called for evidence.They have got it, in spades. The so-called impact assessments for no deal are, quite simply, horrifying. They were underlined recently by the Bank of England governor, Mark Carney, who rightly drew attention to the messages coming through loud and clear from business, trade unions, the City and, not least, food suppliers, road hauliers, ports and airports.My suspicion is that the MPC only raised interest rates the other week to give it scope to lower them again Continue reading...

The banking crisis prompted talk of economic reform, shared prosperity and a ‘march of the makers’. None of it has happenedA decade ago, Britain was in the early stages of what would turn out to be the deepest recession of recent times. It has never really recovered.Only twice in the past 10 years has the economy broken out of its post-crisis torpor. The first time was in late 2009 and early 2010, when the country was jolted back into life by the monetary and fiscal stimulus provided by the Bank of England. That rally was killed off by George Osborne’s ill-timed austerity and by the protracted troubles of the eurozone. Continue reading...

Figures for wages, inflation and consumer spending, due this week, are likely to reinforce the view that the British economy is far from boomingThe ability of the British economy to improve the living standards of workers will come back under the microscope this week, when the latest figures for wages, employment and inflation are revealed by government statisticians.The Bank of England reckons higher wages are just around the corner, helped by the lowest rate of unemployment since the mid-1970s, yet economists are doubtful there will be much positive news just yet. While the economy has gathered pace in recent months, helped by the warmer weather, the royal wedding and the World Cup, there has been little evidence so far of the spoils being shared through pay increases. Continue reading...

Ghost broking, gross written premiums and capex, not to mention the wonderful world of opexThe world of finance and business and, by extension, the City pages of newspapers, continues to be a bewildering place. Last week, there was mention of ghost broking and gross written premiums, while another report had the following gem: “Given that guidance was reiterated 10 weeks ago, operations have clearly taken a marked turn for the worse and the lack of new guidance indicates that management is currently unable to forecast its own business.” Reading between the lines, I suspect this means that the high-ups haven’t a bloody clue what they are doing and need a big kick up the backside.Elsewhere, reporting on Blackstone, a $43bn investment giant, we had: “When companies’ earnings are up, they tend to be more inclined to hire. They tend to be more inclined to capex [capital investment].” Thank heavens for the explanation in square brackets, though I do feel that the above was a bit stating the bleeding obvious. And I’m giving Jonathan Gray, Blackstone’s chief operating officer, the benefit of the doubt that he is using capex as a noun and not a verb, but given the looseness of language use of executive types, I still harbour doubts. And I think we’ll leave opex for another day. Continue reading...

Turkey’s currency has plummeted as relations with the US have worsenedThe Turkish president, Recep Tayyip Erdoğan, has repeated a call for Turks to sell dollars and euros to support the national currency, which has been in freefall over concerns about the economy and deteriorating ties with the US.On Saturday, Erdoğan urged Turks to help support the lira to win what he described as a “war of independence”.Related: Turkey's economic crisis deepens as Trump doubles tariffs Continue reading...

Recep Tayyip Erdoğan tried to restore confidence in the Turkish lira after it plunged by more than 20% against the dollar on Friday. The sudden drop came when Donald Trump announced on Twitter he was doubling US import tariffs on Turkish steel and aluminium.The Turkish president called on Turks to exchange dollars, euros and gold for Turkish lira. He said this would be Turkey’s response ‘to those who wage economic war against us’.The lira has been under sustained pressure on foreign exchanges, dropping by almost 50% against the dollar in the past 12 months.

US president has tweeted that ‘our relations with Turkey are not good at this time!’Turkey’s unfolding economic crisis has deepened further after Donald Trump announced he was doubling US import tariffs on Turkish steel and aluminium, stoking the country’s currency freefall and rattling financial markets.The Turkish lira plunged by more than 20% against the dollar after the president announced the move, amid a widening dispute between Washington and Ankara over the imprisonment of the US pastor Andrew Brunson.I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!What is the IMF? Continue reading...

All the day’s economic and financial news, including new growth figures for the UK and the financial crisis in Turkey

Warmer weather helps British economy grow by 0.4% but factory orders drop againWarmer weather helped the British economy grow at a faster pace in the three months to the end of June, despite official figures showing the manufacturing sector slumped into recession for the first time since the Brexit vote.The Office for National Statistics (ONS) said GDP increased by 0.4% in the second quarter from a rate of 0.2% in the previous three months, helped by stronger retail sales and good weather, which enabled the construction industry to make up lost ground from heavy snow earlier this year.Gross domestic product (GDP) is a key government statistic and provides a measure of the UK's total economic activity. Continue reading...

Outgoing MPC member Ian McCafferty predicts rates below 5% and wages up 4%The era of low interest rates will last for at least another 20 years, despite gently rising official borrowing costs in the coming years, one of the Bank of England’s leading policymakers has forecast.In a valedictory interview before leaving Threadneedle Street’s monetary policy committee (MPC) at the end of the month, Ian McCafferty said structural changes in the global economy meant UK borrowers and savers should get used to interest rates being “significantly” below the 5% average in the 10 years leading up to the financial crisis. Continue reading...

At local level Conservatives can see the harm wrought by austerity, but that insight has not reached the party’s upper echelonsThe Conservatives often seem unsure whether to present budget cuts as painful but necessary or painless and desirable. Tory ideologues see state spending as inimical to enterprise and corrosive of personal freedom, but pragmatists recognise that public service users do not feel austerity as a kind of liberation.To reconcile the two positions, David Cameron invented the “big society” – the idea that voluntary work could fill gaps in government provision of services. But piecemeal good work done under the “big society” banner could never soften blows from the chancellor’s axe. Continue reading...

The ‘whole month approach’ to changes of circumstances will create problems for universal credit recipients, says Fran Bennett; Sarah Sheils says parliament’s failure to tackle child food poverty has a long historyYour report (Households left in debt by flaws in design of universal credit system, 6 August) rightly focuses on the rigidity of the monthly assessment for universal credit when it comes to the different ways in which people are paid. But the report from the Child Poverty Action Group published that day also highlighted the “whole-month approach” to changes of circumstances, which will create additional problems. So, for example, if you move to a flat with a lower rent in the middle of the month, that is the rent you are assumed to have paid for the whole month when your universal credit is worked out – leaving you with a shortfall. And if your daughter moves out the day before your assessment date, you will get no universal credit for having fed her for the whole of that month. So your universal credit may go up and down in an arbitrary way in relation to your needs, depending on when things happen. Yet you are expected to be learning to budget on a monthly basis. You couldn’t make it up.

Peak Pegasus became unlikely hit on Chinese social media as it tried to beat tariff deadlineA shipment of soya beans worth more than $20m (£15.5m) has been bobbing aimlessly in the Pacific Ocean for a month, a casualty of the escalating trade war between China and the US.Lingering uncertainty over the cargo’s fate offered a timely reminder of the fallout from a dispute that intensified on Wednesday, as the US president, Donald Trump, unveiled a second round of tariffs on $16bn of Chinese goods, prompting Beijing to respond in kind.Related: China hits back against latest US tariffs; pound hit by Brexit worries – business live Continue reading...

That life expectancy in Britain has slowed to a standstill is down to one thing only: the Tories’ ideologically driven policies“We got there in the end – a remarkable national effort”: that’s how former chancellor George Osborne celebrated the government meeting his deficit target on the day-to-day budget two years late. “It was the right thing to do,” was David Cameron’s smug echo.It’s easy for the architects of the Tories’ ideologically driven austerity to be triumphalist, given they did not suffer the consequences: the worst squeeze in wages of the major industrialised countries except depression-ravaged Greece; the slashing of social security for low-paid workers and disabled people; the surging child poverty. New research suggests that austerity played a key role in the Brexit vote, which plunged Britain into national crisis, too, and which turfed both men out of office, although both continue to prosper, Cameron with his “trotters up”, as Danny Dyer so memorably put it. But there is another devastating consequence of their austerity that is too little discussed: that it kills.What is austerity?Related: The growing gulf in life expectancy shows how austerity has deepened inequalities Continue reading...

Citigroup analysis also points to rapid growth in consumer spending and rise in royaltiesMusicians in the US received just 12% of the revenues their music generated in 2017, according to a report, though that figure is an improvement on the 7% they received in 2000.The report, by Citigroup, finds that “consumer outlays (concerts, subscriptions) are at all-time highs”, returning to a peak after a decline from 2006-10. Continue reading...

Musk tweets plan as it emerges Saudi Arabia has built up $2.9bn stake in tech giantElon Musk has launched a campaign to take Tesla private on a day that included several provocative tweets, a suspension (and resumption) of trading in the company’s shares, reports of a significant Saudi investment, a surge in stock price, and an evocative, Musk-tinged appeal to the Tesla faithful: “The future is very bright and we’ll keep fighting to achieve our mission.”The ride started with Tesla’s stock rising more than 7% after Musk tweeted he was “considering taking Tesla private” and had funding in place to do so at a price of $420 (£325) per share. Shortly afterwards, Tesla published a blogpost written by Musk entitled ‘Taking Tesla private’ that had been sent to all employees.Am considering taking Tesla private at $420. Funding secured.Related: Tesla countersued by 'whistleblower' it accused of sabotage and shooting threat Continue reading...

Rampant inflation, a falling currency and tensions with the US are hurting Turkish consumers and businessesTurkey is facing mounting pressure to announce an emergency rise in interest rates as rampant inflation, a plunging currency and American sanctions pushes one of the world’s key emerging market countries to the brink of crisis.Analysts said Turkey’s central bank would have no choice but to increase borrowing costs aggressively in the coming days to stem the fall in the lira, which is down by almost a third against the US dollar in the past 12 months and hit a record low this week. Continue reading...

Sterling still struggling on fears of a no-deal Brexit but recovers some of Monday’s losses2.46pm BSTThe pound has stabilised a little after this week’s drop to an 11 month low on growing concerns about a no-deal Brexit.It has gained a little ground against the dollar - up 0.03% - but is still in negative territory against the euro - down 0.37%.2.34pm BSTThe rise in the oil price has lifted US energy stocks and pushed Wall Street higher at the open.The Dow Jones Industrial Average is currently 0.4% or 101 points while the S&P 500 has opened up 0.23% and the Nasdaq Composite is 0.28% better.2.26pm BSTAnd here’s our full story on the Halifax house price survey:Related: UK house prices rising faster than wage increases, Halifax says1.23pm BSTHere’s our latest story on the US sanctions on Iran:Donald Trump has warned America’s trading partners that anyone who does business with Iran will not be doing business with the US, after his administration reimposed blanket sanctions.The US president described the new sanctions, which hit Iran’s access to dollars, gold and precious metals, as “the most biting ever imposed”.Related: Trade with Iran and you won't trade with US, Trump warns1.06pm BSTUS markets are expected to open higher:US Opening Calls:#DOW 25580 +0.30%#SPX 2855 +0.17%#NASDAQ 7453 +0.18%#IGOpeningCall12.03pm BSTThe VIX index - a measure of the stock market’s expectation of volatility - is heading lower.It is currently down 2% at 11.03 having earlier fallen to 10.9, the lowest level since January.Vix getting crushed back to Jan lows, complacency taking over again11.49am BSTThe US-China trade battle could spill over from goods into services, according to S&P Global Ratings. The S&P report ssays:This is because China is running out of room to retaliate on goods.. China’s recent threat to impose tariffs of 5% to 25% on a further $60 billion worth of U.S. goods (5,207 product lines) means that, together with the $50 billion of goods already announced, about 85% of its American imports (totaling $130 billion in 2017) could be taxed.The threat is in response to the Trump administration last week announcing that it may increase its proposed tariff rate on Chinese imports valued at about $200 billion to 25% from 10%. Together with the previously-announced tariffs on $50 billion of Chinese imports, the total amount of $250 billion represents about 50% of the value of China’s annual exports to the U.S. in 2017.11.21am BSTOil prices are continuing to rise in the wake of Trump’s new Iranian sanctions. Brent crude is now up 1.27% at $74.69 a barrel. West Texas Intermediate - the US benchmark - has climbed 0.94% to $69.66. David Cheetham, chief market analyst at XTB, says:The US has reimposed sanctions against this morning, with an executive order signed by President Trump that targets financial transactions involving the US dollar, the purchase of commercial plans and metals including gold and the Iranian automotive sector coming into effect. From a financial markets point of view, the price of crude oil could be where these decisions are most keenly felt, with the increased animosity threatening to disrupt Tehran’s significant output. This is unlikely to be reflected immediately, with Iranian production expected to remain at present levels for the time being, but should further more stringent sanctions come into play then we could well be set for a supply shock in the oil market which would trigger a sharp move higher.The complex nature of this situation means that it is not just the US and Iran that could be impacted, with the bulk of Iranian crude actually being sold to other countries. The issue lies in whether the US look to force allies to also shun oil from Iran, and if this occurs then there’s a real chance that OPEC will struggle to make up the lost supply and this would drive the price of oil up.10.45am BSTBack with the Iran sanctions, and President Trump has just tweeted:The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!10.38am BSTUK consumers are continuing to spend, boosted by the World Cup and the heatwave, according to the latest Barclays trend survey, although there are reasons to be cautious about the outlook.Spending grew by 5% year on year in July, the third consecutive month with spending growth around this level. Barclays said:[This] is the strongest consistent growth in our data history. UK domestic sectors have held up year to date and resilient spending should continue to support their near-term performance.There are reasons to be cautious, as consumers remain negative about the general economy and appetite for large purchases remains muted.Outside influences, such as oil price inflation and FX, combine to push up spending on Petrol. Consumer confidence moved slightly lower in July, as negativity about the general economy persists. The appetite for major purchases remained muted, with consumers cautious about making significant spending commitments, evident in subdued spending on electronics, furniture, household appliances and vehicle sales.This summer’s heat wave and World Cup fever boosted consumer spending in July, with people spending on picnics, BBQs and pubs.People are making the most of the sunshine as spending on food increased 6.7% in the month, while more families are also going on day trips and doing outdoor activities.10.23am BSTA reasonably strong performance from US markets on Monday is one of the reasons for a more positive mood in Asia (the Nikkei 225 was up 0.69%) and Europe. Chris Beauchamp, chief market analyst at IG, said:UK and European markets have rallied this morning, carrying the baton over from last night’s better showing for US markets. Confidence has returned as the S&P 500 moseys its way to towards the January record high, and it remains encouraging to see stock markets hold their ground despite a drumbeat of trade war headlines of late.Earnings season is shaping up very well indeed, which accounts for why US equities remain comfortably ahead of the likes of Europe, but a rising tide lifts all boats and will reinforce the impression that this economic recovery and its associated bull market has further to run. Reasons to be cautious still abound however, with the Reserve Bank of Australia’s overnight view that China is seeing a modest slowdown in growth reminding us that all is not entirely rosy out there, and this morning’s decline in German industrial production added to this impression, coming as it does after yesterday’s grim factory orders data.10.00am BSTThe positive mood in stock markets is holding up as the morning progresses.With copper prices edging higher, mining shares are leading the FTSE 100 higher, with the leading UK index now up 0.69%. Oil is also giving support, with crude moving ahead on the prospect of curtailed supplies from Iran following the imposition of US sanctions on the country.9.18am BSTThere are a few notes of caution over UK house prices despite the stronger than expected Halifax data.Jonathan Samuels, chief executive of property lender, Octane Capital, said:It would be premature to pop the champagne corks on the back of this seemingly robust data.The annual rate of growth may have shot up between June and July but weak supply rather than robust demand is the primary driver. The market might look punchy on the outside but it’s pallid on the inside. Transaction levels overall are low and it’s hard to see them picking up materially in the months ahead as Brexit uncertainty heightens.We remain doubtful #UK #housing market is stepping up a gear despite #Halifax reporting #house prices spiked 1.4% m/m in July taking annual increase up to 3.3% . Activity is still relatively lacklustre despite coming modestly off 2018 lows with consumer conditions challenging https://t.co/IP3NDFhmIxThe market has seen far too many false dawns to allow itself to get carried away by these surprisingly strong numbers.Yet with the rate of annual price growth rising to its highest level so far this year, the progress is no flash in the pan.8.56am BSTMarkets are holding on to their opening gains, limited though they may be. Connor Campbell, financial analyst at Spreadex said:After yesterday’s trade war-fearing, Brexit-bitten session, the markets got off to a brighter start on Tuesday, without really any reason to do so.Though it still couldn’t break out of its recent trading bracket, the FTSE at least pushed to the upper end of it after the bell, climbing 25 points to hit 7685. The index’s main boost came from the commodity sector. With copper up 0.7% the likes of Rio Tinto and Anglo American rose anywhere between 1.3% and 2%, while BP and Shell jumped 0.8% and 0.5% respectively as Brent Crude crossed $74 per barrel following the resumption of the US sanctions on Iran.8.40am BSTSigns of life in the UK housing market with a better than expected report from mortgage lender Halifax.House prices rose 1.4% month on month in July, compared to expectations of a 0.2% increase, according to the Halifax. The 3.3% year on year increase was higher than the forecast 2.7% gain. But managing director Russell Galley said:Whilst the quarterly and annual rates of house price growth have improved, housing activity remains soft.#Halifax reports #UK #house #prices rose much stronger-than-expected 1.4% m/m in July; annual rate of increase picked up to 3.3% in 3 months to July (highest since 3 months to November 2017) from 1.8% in 3 months to June (equal lowest level since 3 months to March 2013).8.27am BSTSterling is set for continued volatility in the run up to Brexit day next March, according to Thanos Vamvakidis, head of G-10 foreign exchange strategy at Bank of America Merrill Lynch. He told CNBC:If we don’t get a deal, sterling can be weaker by about 10 percent, (or) even lower. If you get a deal, any deal, …. (sterling) can be up by 10 percent. I don’t think any other currency can have this kind of moves in the next few months.8.23am BSTAs expected, markets have got off to a slow start in Europe, but a mainly positive one.The FTSE 100 is up 0.28%, helped by a rise in commodity stocks following the stronger oil price, while France’s Cac has climbed 0.32% and Germany’s Dax is up 0.48%.Domino’s Pizza reported another firm set of half-year numbers this morning as the investment in digital, especially mobile, pays off in terms of driving top line sales. There’s still plenty of evidence that shifting consumer habits are supportive and while the hot weather took the shine off the second quarter numbers a little, the World Cup offered some compensation. However, investment in its international expansion weighed on profit growth.Underlying profits rose 2.5% but on a statutory basis profits were down 10% due to a load of exceptional costs that seem to have mounted: £1.9m from its Warrington supply chain centre, a £2.1m hit from Norway as it transforms Dolly Dimples into Domino’s, £1.4m from joint venture store conversion in Germany and a further £4.2m from tax, amortisation and German Market Access Fee increase charges recognised on the income statement as non-underlying items. Nevertheless the underlying picture remains positive.8.16am BSTThe June data for Germany so far has been uniformly weak, says Dr Andreas Rees, economist at UniCredit Bank:Industrial production declined 0.9% mom, while exports treaded water (yesterday’s new orders: -4.0%). However, in all three cases, the decreases (or stagnation) came after strong rises in the previous month.Going forward, we expect a moderate acceleration in the industrial sector on average, driven by global trade and solid domestic demand. However, it could become a bumpy ride over the summer months. July, August and sometimes September months are notorious for even more volatility, given the start and end of the vacation period. The usual suspect is the car sector. In the last five years, auto production embarked on a wild rollercoaster four times. Auto companies ramp up their production before the summer holidays with a technical setback following suit one month later. This effect then plays havoc with the headline figures in the corresponding two months.7.57am BSTThe disappointing industrial figures from Germany do not necessarily mean the country’s economy is heading for trouble, suggests ING Bank economist Carsten Brzeski:German industrial production took a hit in June, dropping by 0.9% MoM, from 2.4% MoM in May. On the year, industrial production was still up by 2.5%. The drop in industrial activity was broadly-based. After three strong months, activity in the construction sector also weakened, declining by 3.2% MoM. At the same time, exports held up relatively well, despite the delayed impact from last year’s euro strengthening and trade tensions, remaining flat in June after a 1.8% MoM increase in May. As imports increased by 1.2% MoM, the seasonally-adjusted trade surplus narrowed to 19.3bn euro, from 20.4bn euro in May.After yesterday’s disappointing new orders data, speculations about an imminent downswing of the German economy have gained new momentum. Intuitively, weak June data can be associated with trade tensions. However, in our view, this intuition is not so straight-forward. The analysis of the German economy requires more nuances. Here is our take on the state of the economy.2. Looking at bilateral trade data, German exports have gone through a slight structural shift since the start of the year. While the share of German exports to the US is currently lower than in 2017, the share of other Eurozone countries like the Netherlands, Italy or Spain has actually increased.3. At least in the short run, weakening demand for German products as illustrated by yesterday’s disappointing new orders data could actually bring some relief. Particularly the manufacturing sector has been suffering from severe supply-side constraints, with capacity utilisation at its highest level since early 2008, a high lack of qualified workers and equipment as a limiting factor. Orders books are still richly filled and it would take a while before a protracted decline in demand would show in activity data.7.45am BSTGood morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.With growing concerns about a no-deal Brexit in the past couple of days - as warned by such diverse personalities as Bank of England governor Mark Carney and Sir Liam Fox - the pound hit an 11 month low on Monday.European Opening Calls:#FTSE 7672 +0.10%#DAX 12617 +0.15%#CAC 5486 +0.15%#MIB 21625 +0.21%#IBEX 9730 +0.07% Continue reading...

Bank puts annual rate of property inflation at 3.3%, but experts say market activity still lacklustreA surprise spike in UK house prices in July has increased the annual rate of property inflation to 3.3%, pushing the cost of buying a home to a record high.Halifax said house prices rose 1.4% in July alone, taking the average house price to a new record of £230,280. The annual growth rate jumped from 1.8% in June to 3.3% in July, the largest increase since last November. Continue reading...

Companies told to ignore White House demands to drop all business with IranThe EU has launched an attempt to protect European businesses from Donald Trump’s sanctions against Iran as the US administration voiced its intent to apply maximum pressure on Tehran by vigorously applying its punitive measures.

Many of the building society’s savers will see only a 0.1% increaseNationwide is not passing on last week’s Bank of England’s 0.25% rate rise in full to savers in the first sign that big financial institutions will use the base rate to increase profit margins.The building society, one of the biggest mortgage and savings institutions in the UK, said that while its tracker mortgage customers will see a 0.25% rise in their payments, many of its savers will see only a 0.1% increase in rates.Related: Bank of England raises interest rates to 0.75% Continue reading...

All the day’s economic and financial news, as Germany’s manufacturers suffer a big drop in new orders, and the pound falls towards $1.29

The country’s presidents have more influence over long-term trends than short-term fluctuationsPresident Donald Trump regularly thumps his chest and claims credit for each new uptick of the fast-growing US economy. But when it comes to economic performance, the country’s presidents have considerably more influence over long-term trends than over short-term fluctuations.Trump’s tax cuts and spending hikes have indeed provided extra short-term stimulus. So, too, apparently, have foreign buyers of American products such as soybeans, who are rushing to stock up before the tariff war fully heats up.Related: Is this the end of the road for the euro? | Hans-Werner SinnMany of the regulations that Trump is targeting ought to be strengthened, not eliminated Continue reading...