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You can find the current article at its original source at http://www.theguardian.com/business/live/2015/nov/24/german-trade-low-mark-carney-us-growth-live
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| Version 5 | Version 6 |
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| Mark Carney testifies to parliament; US growth revised up - as it happened | Mark Carney testifies to parliament; US growth revised up - as it happened |
| (about 1 month later) | |
| 2.24pm GMT | 2.24pm GMT |
| 14:24 | 14:24 |
| Afternoon summary | Afternoon summary |
| Time for a recap. | Time for a recap. |
| The US economy is growing faster than expected. Growth in the last quarter has been revised up to +2.1% (annualised) or just over 0.5% quarter-on-quarter. | The US economy is growing faster than expected. Growth in the last quarter has been revised up to +2.1% (annualised) or just over 0.5% quarter-on-quarter. |
| Analysts aren’t blown away by the figures, which partly reflect inventory changes. But it may raise the chances of an interest rate rise next month. | Analysts aren’t blown away by the figures, which partly reflect inventory changes. But it may raise the chances of an interest rate rise next month. |
| In the UK, the Bank of England has flagged up that action may be taken to calm consumer credit. | In the UK, the Bank of England has flagged up that action may be taken to calm consumer credit. |
| In an appearance before MPs, governor Mark Carney also said that: | In an appearance before MPs, governor Mark Carney also said that: |
| We’ve also had mixed economic data from Germany | We’ve also had mixed economic data from Germany |
| The Greek government has condemned a bomb explosion in Athens overnight | The Greek government has condemned a bomb explosion in Athens overnight |
| French tourism has taken a hit from the Paris terror attacks, with visits to the capital falling. | French tourism has taken a hit from the Paris terror attacks, with visits to the capital falling. |
| And European stock markets are all in the red today, as investors pile into safe-havens like government bonds and gold as the Russian jet crisis deepens: | And European stock markets are all in the red today, as investors pile into safe-havens like government bonds and gold as the Russian jet crisis deepens: |
| Related: Putin calls Turkey 'accomplices of terrorists' after Russian jet shot down - live updates | Related: Putin calls Turkey 'accomplices of terrorists' after Russian jet shot down - live updates |
| 2.23pm GMT | 2.23pm GMT |
| 14:23 | 14:23 |
| Here’s Capital Economic’s Paul Ashworth, explaining how consumers are driving the US economy: | Here’s Capital Economic’s Paul Ashworth, explaining how consumers are driving the US economy: |
| The alternative real gross domestic income measure suggests that the economy expanded by an even stronger 3.1% annualised in the third quarter. Moreover, the disappointing 0.7% gain in real GDI in the second quarter was revised up to a much healthier 2.2%. | The alternative real gross domestic income measure suggests that the economy expanded by an even stronger 3.1% annualised in the third quarter. Moreover, the disappointing 0.7% gain in real GDI in the second quarter was revised up to a much healthier 2.2%. |
| Most of the solid third-quarter gain in incomes accrued to households, with real personal disposable income increasing by as much as 3.9% annualised. Nominal personal incomes increased by 5.1% annualised. In contrast, corporate profits declined by 1.1% last quarter, which translates into an annualised decline of roughly 4.5%. | Most of the solid third-quarter gain in incomes accrued to households, with real personal disposable income increasing by as much as 3.9% annualised. Nominal personal incomes increased by 5.1% annualised. In contrast, corporate profits declined by 1.1% last quarter, which translates into an annualised decline of roughly 4.5%. |
| 2.02pm GMT | 2.02pm GMT |
| 14:02 | 14:02 |
| This US growth report doesn’t set the world alight for investors, says Nancy Curtin, Chief Investment Officer at Close Brothers Asset Management. | This US growth report doesn’t set the world alight for investors, says Nancy Curtin, Chief Investment Officer at Close Brothers Asset Management. |
| However, it is another important sign that the US economy may be robust enough to handle a rate hike. | However, it is another important sign that the US economy may be robust enough to handle a rate hike. |
| She explains: | She explains: |
| Jobs figures for October smashed expectations, while consumer sentiment remains strongly upbeat. Retail figures have been a little more mixed, but this is more a reflection of a new smarter and cost conscious consumer than any fundamental economic issues. Inventory de-stocking weighed on third quarter growth, but as companies rebuild their inventories, this actually bodes well for the figures in the final quarter. | Jobs figures for October smashed expectations, while consumer sentiment remains strongly upbeat. Retail figures have been a little more mixed, but this is more a reflection of a new smarter and cost conscious consumer than any fundamental economic issues. Inventory de-stocking weighed on third quarter growth, but as companies rebuild their inventories, this actually bodes well for the figures in the final quarter. |
| “All of this has seen the Fed seemingly pencil in a rate rise next month, a vote of confidence in the US’ economic stability. In fact, Yellen couldn’t have been much more clear that she expects to start rate normalisation in December. We don’t expect this to startle markets. Not only has it been on the cards for quite some time, but the Fed has repeatedly reassured that rate rises will be steady and incremental, rather sharp and substantial hikes.” | “All of this has seen the Fed seemingly pencil in a rate rise next month, a vote of confidence in the US’ economic stability. In fact, Yellen couldn’t have been much more clear that she expects to start rate normalisation in December. We don’t expect this to startle markets. Not only has it been on the cards for quite some time, but the Fed has repeatedly reassured that rate rises will be steady and incremental, rather sharp and substantial hikes.” |
| 1.59pm GMT | 1.59pm GMT |
| 13:59 | 13:59 |
| The growth uplift is also due to US companies restocking their inventories at a faster pace than expected. | The growth uplift is also due to US companies restocking their inventories at a faster pace than expected. |
| The Commerce Department now believes that firms bought $90bn of new supplies, now the $56.8bn first estimated. That means inventory changes only cut GDP by 0.6%, not the 1.4% first estimated. | The Commerce Department now believes that firms bought $90bn of new supplies, now the $56.8bn first estimated. That means inventory changes only cut GDP by 0.6%, not the 1.4% first estimated. |
| Good news - except it dampens hopes that firms would restock aggressively in the current quarter. | Good news - except it dampens hopes that firms would restock aggressively in the current quarter. |
| 1.52pm GMT | 1.52pm GMT |
| 13:52 | 13:52 |
| There’s not much reaction in the markets to the GDP figures. | There’s not much reaction in the markets to the GDP figures. |
| The Dow Jones industrial average is still expected to fall by over 100 point when Wall Street opens, in 40 minutes. | The Dow Jones industrial average is still expected to fall by over 100 point when Wall Street opens, in 40 minutes. |
| Investors are primarily gripped by the unfolding diplomatic crisis following the downing of a Russian jet by Turkish military today: | Investors are primarily gripped by the unfolding diplomatic crisis following the downing of a Russian jet by Turkish military today: |
| Related: Putin condemns Turkey after Russian warplane downed near Syria border | Related: Putin condemns Turkey after Russian warplane downed near Syria border |
| 1.39pm GMT | 1.39pm GMT |
| 13:39 | 13:39 |
| US Q3 GDP revised higher: GDP expanded at a 2.1% annual pace in Q3, up from 1.5% reported last month. pic.twitter.com/ziRrusyAYp | US Q3 GDP revised higher: GDP expanded at a 2.1% annual pace in Q3, up from 1.5% reported last month. pic.twitter.com/ziRrusyAYp |
| 1.38pm GMT | 1.38pm GMT |
| 13:38 | 13:38 |
| This stronger US growth could encourage the Federal Reserve to raise interest rates next month. | This stronger US growth could encourage the Federal Reserve to raise interest rates next month. |
| The FT says | The FT says |
| Although third quarter growth remains well below the 3.9 per cent rate recorded for the second quarter, the solid numbers - fuelled by improved consumer spending - should reinforce the view among US policymakers that the economy is on a steady growth trajectory. | Although third quarter growth remains well below the 3.9 per cent rate recorded for the second quarter, the solid numbers - fuelled by improved consumer spending - should reinforce the view among US policymakers that the economy is on a steady growth trajectory. |
| US third quarter growth revised higher https://t.co/fOol6WYs5d | US third quarter growth revised higher https://t.co/fOol6WYs5d |
| 1.35pm GMT | 1.35pm GMT |
| 13:35 | 13:35 |
| US growth revised up to 2.1% | US growth revised up to 2.1% |
| Breaking news -- the US economy grew faster than first estimated in the last quarter. | Breaking news -- the US economy grew faster than first estimated in the last quarter. |
| The Commerce Department has just announced that US GDP grew by 2.1% (annualised) between the start of July and the end of September. Up from an original eatimate of 1.5%. | The Commerce Department has just announced that US GDP grew by 2.1% (annualised) between the start of July and the end of September. Up from an original eatimate of 1.5%. |
| That’s equates to growth of just over 0.5% during the quarter. | That’s equates to growth of just over 0.5% during the quarter. |
| That broadly matches the UK’s own growth, and beats the eurozone’s 0.3% expansion. | That broadly matches the UK’s own growth, and beats the eurozone’s 0.3% expansion. |
| The Commerce Department says that business investment was stronger than first thought -- rising by 2.4%, not the initial estimate of 2.1%. | The Commerce Department says that business investment was stronger than first thought -- rising by 2.4%, not the initial estimate of 2.1%. |
| But consumer spending has been revised lower, to 3% from 3.2%. | But consumer spending has been revised lower, to 3% from 3.2%. |
| *U.S. BUSINESS INVESTMENT IN EQUIPMENT ALSO REVISED UP *CONSUMER SPENDING IN 3Q REVISED TO 3% INCREASE FROM 3.2% | *U.S. BUSINESS INVESTMENT IN EQUIPMENT ALSO REVISED UP *CONSUMER SPENDING IN 3Q REVISED TO 3% INCREASE FROM 3.2% |
| Updated | Updated |
| at 1.41pm GMT | at 1.41pm GMT |
| 1.18pm GMT | 1.18pm GMT |
| 13:18 | 13:18 |
| Bank may need to rein in consumer spending | Bank may need to rein in consumer spending |
| Observer economics editor Heather Stewart was at today’s session, and reports: | Observer economics editor Heather Stewart was at today’s session, and reports: |
| Bank of England policymakers may need to rein in consumer lending to prevent a borrowing bubble from emerging as the economy recovers, chief economist Andy Haldane has warned. | Bank of England policymakers may need to rein in consumer lending to prevent a borrowing bubble from emerging as the economy recovers, chief economist Andy Haldane has warned. |
| Appearing before the cross-party Treasury select committee alongside the Bank’s governor Mark Carney, Haldane warned that consumer credit – in particular personal loans – was “picking up at a rate of knots”. | Appearing before the cross-party Treasury select committee alongside the Bank’s governor Mark Carney, Haldane warned that consumer credit – in particular personal loans – was “picking up at a rate of knots”. |
| “That ultimately might be an issue that the financial policy committee (FPC) might want to look at fairly carefully,” he said. | “That ultimately might be an issue that the financial policy committee (FPC) might want to look at fairly carefully,” he said. |
| The FPC, created in the wake of the financial crisis, is meant to prevent future crashes by allowing the Bank to take action to control particular markets without using the blunter tool of interest rates. | The FPC, created in the wake of the financial crisis, is meant to prevent future crashes by allowing the Bank to take action to control particular markets without using the blunter tool of interest rates. |
| The FPC has already stepped in to constrain mortgage lending; but its powers to confront a credit bubble are untested. | The FPC has already stepped in to constrain mortgage lending; but its powers to confront a credit bubble are untested. |
| Carney told MPs he could not say much about the FPC, as he is in “purdah” as its next meeting approaches; although he confirmed that the rapid pace of credit growth was something it might need to look at..... | Carney told MPs he could not say much about the FPC, as he is in “purdah” as its next meeting approaches; although he confirmed that the rapid pace of credit growth was something it might need to look at..... |
| Here’s her full story: | Here’s her full story: |
| Related: Consumer spending troubling Bank of England | Related: Consumer spending troubling Bank of England |
| Updated | Updated |
| at 2.10pm GMT | at 2.10pm GMT |
| 1.05pm GMT | 1.05pm GMT |
| 13:05 | 13:05 |
| The pound fell as Carney, Haldane et al testified to MPs, and gave little indication that interest rates are going to rise soon: | The pound fell as Carney, Haldane et al testified to MPs, and gave little indication that interest rates are going to rise soon: |
| 12.41pm GMT | 12.41pm GMT |
| 12:41 | 12:41 |
| Today’s session has highlighted the differences at the heart of the Bank of England, says Ranko Berich, head of market analysis at Monex Europe: | Today’s session has highlighted the differences at the heart of the Bank of England, says Ranko Berich, head of market analysis at Monex Europe: |
| Today’s Monetary Policy Committee testimony showed quite clearly that the Bank of England is not unconditionally committed to maintaining loose monetary policy. | Today’s Monetary Policy Committee testimony showed quite clearly that the Bank of England is not unconditionally committed to maintaining loose monetary policy. |
| Andy Haldane once again cemented his position as the most dovish MPC member, giving a very robust defence of his willingness to consider further cuts to interest rates. | Andy Haldane once again cemented his position as the most dovish MPC member, giving a very robust defence of his willingness to consider further cuts to interest rates. |
| “It’s important to note that dissent in the MPC is not only acceptable, but desirable. The act that Haldane balances the risks to inflation differently to other MPC members is precisely why a committee votes on rates, as opposed to having one decision maker. If the entire MPC had the same view, there would be no point in the committee. Haldane’s views do have merit and if the data begins to support them more conclusively, the rest of the MPC is bound to take notice. | “It’s important to note that dissent in the MPC is not only acceptable, but desirable. The act that Haldane balances the risks to inflation differently to other MPC members is precisely why a committee votes on rates, as opposed to having one decision maker. If the entire MPC had the same view, there would be no point in the committee. Haldane’s views do have merit and if the data begins to support them more conclusively, the rest of the MPC is bound to take notice. |
| 12.21pm GMT | 12.21pm GMT |
| 12:21 | 12:21 |
| Finally, Andrew Tyrie wants more details about the meetings taking place between the Monetary Policy Committee and Financial Policy Committee (which Carney mentioned earlier). | Finally, Andrew Tyrie wants more details about the meetings taking place between the Monetary Policy Committee and Financial Policy Committee (which Carney mentioned earlier). |
| Q: Given the importance of these meetings, are any minutes being kept? | Q: Given the importance of these meetings, are any minutes being kept? |
| There are two sets of minutes, governor Carney replies - one for the FPC covering financial stability issues, and one for the MPC with monetary policy points. | There are two sets of minutes, governor Carney replies - one for the FPC covering financial stability issues, and one for the MPC with monetary policy points. |
| This looks like duplication to Tyrie, who suggests the Bank considers producing just one set of minutes - ideally for public release. | This looks like duplication to Tyrie, who suggests the Bank considers producing just one set of minutes - ideally for public release. |
| “We’ll take a look at that”, Carney agrees. | “We’ll take a look at that”, Carney agrees. |
| And that’s the end of the session. | And that’s the end of the session. |
| Updated | Updated |
| at 12.22pm GMT | at 12.22pm GMT |
| 12.13pm GMT | 12.13pm GMT |
| 12:13 | 12:13 |
| Andrew Tyrie turns the spotlight onto Andy Haldane, asking: | Andrew Tyrie turns the spotlight onto Andy Haldane, asking: |
| A: Is Chris Giles [of the Financial Times] right when he says the MPC needs to take seriously the view of its chief economist Andy Haldane that interest rates even at 0.5 per cent are providing little economic stimulus? | A: Is Chris Giles [of the Financial Times] right when he says the MPC needs to take seriously the view of its chief economist Andy Haldane that interest rates even at 0.5 per cent are providing little economic stimulus? |
| Haldane looks deliciously foxed for a moment (you can almost see him thinking ‘when did I say THAT?’). | Haldane looks deliciously foxed for a moment (you can almost see him thinking ‘when did I say THAT?’). |
| I don’t recall saying that, Haldane replies, scratching his ear, and it’s not really my view. | I don’t recall saying that, Haldane replies, scratching his ear, and it’s not really my view. |
| But, if monetary policy was too stimulatory, you’d see an economy growing faster than trend. | But, if monetary policy was too stimulatory, you’d see an economy growing faster than trend. |
| We have an economy that is growing at trend, and slowing. And there’s not much sign that pricing pressures are picking up. | We have an economy that is growing at trend, and slowing. And there’s not much sign that pricing pressures are picking up. |
| So can we really say that monetary policy is very loose and accommodative? | So can we really say that monetary policy is very loose and accommodative? |
| [Chris Giles’s piece is here: | [Chris Giles’s piece is here: |
| Time to ask why we are still in the era of ultra-low rates ] | Time to ask why we are still in the era of ultra-low rates ] |
| Updated | Updated |
| at 12.14pm GMT | at 12.14pm GMT |
| 12.04pm GMT | 12.04pm GMT |
| 12:04 | 12:04 |
| Kristin Forbes has picked up a hospital pass - agreeing to do some work on the precise impact that migration has on the UK economy. Good luck, professor F.... | Kristin Forbes has picked up a hospital pass - agreeing to do some work on the precise impact that migration has on the UK economy. Good luck, professor F.... |
| 11.52am GMT | 11.52am GMT |
| 11:52 | 11:52 |
| So once interest rates reach 2%, and you can pull both levers (by changing rates and QE), how will you decide which one to grasp? | So once interest rates reach 2%, and you can pull both levers (by changing rates and QE), how will you decide which one to grasp? |
| I long for the day that we face such higher-order questions, smiles Mark Carney. But he won’t give any guidance on that issue now. | I long for the day that we face such higher-order questions, smiles Mark Carney. But he won’t give any guidance on that issue now. |
| [actually, this may be a problem for Carney’s successor, as his term will end in summer 2018] | [actually, this may be a problem for Carney’s successor, as his term will end in summer 2018] |
| 11.49am GMT | 11.49am GMT |
| 11:49 | 11:49 |
| Haldane agrees that the Bank should maintain its stock of UK government debt until interest rates have risen to “around” 2%, as Carney says. But, it’s a guide, not a trigger. | Haldane agrees that the Bank should maintain its stock of UK government debt until interest rates have risen to “around” 2%, as Carney says. But, it’s a guide, not a trigger. |
| Updated | Updated |
| at 11.50am GMT | at 11.50am GMT |