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All eyes on Yellen as Jackson Hole kicks off - business live All eyes on Yellen as Jackson Hole kicks off - business live
(about 1 hour later)
1.50pm BST
13:50
Simon Smith, chief economist at FxPro, thinks Janet Yellen should take a cautious approach to her Jackson Hole speech, which is coming up in a hour an a quarter.
Smith says:
Yellen will do her best to sound upbeat on the US economy, but not to tie her hands into tightening policy this year. The Fed has led the market down the garden path once too often on this front, not least at last year’s Jackson Hole summit, so she’d do well to keep her options open this time and not cause a similar furore this year.”
He adds makes the point that central bankers are running out of rope when it comes to monetary policy stimulus:
The issue is that monetary policy is reaching its limits, even the various forms of quantitative easing and negative interest rates being imposed. This is most true for Japan and the eurozone.
That may encourage central bankers to be even more aggressive in their approach, but there are always unintended consequences. This is certainly true in the eurozone, given the costs that negative rates impose on banks and (increasingly) their customers.
1.34pm BST
13:34
US growth revised slightly lower in second quarter
US GDP growth for the second quarter has been revised down a touch to an annual rate of 1.1%, from an earlier estimate of 1.2%.
The second estimate from the US Commerce Department was in line with the expectations of economists polled by Reuters.
It followed 0.8% growth in the first quarter.
Updated
at 1.36pm BST
1.24pm BST
13:24
European markets remain subdued as we await Yellen’s speech.
The FTSE 100 is down just three points at 6,820.
It’s a similar story across Europe, with the STOXX 600 index down 0.1 points to 341.9.
12.34pm BST12.34pm BST
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Japan's deflationary spiral deepensJapan's deflationary spiral deepens
Earlier in Japan, figures showed consumer prices fell for the fifth month in a row in July, dealing a blow to prime minister Shinzo Abe and his bid to combat deflation.Earlier in Japan, figures showed consumer prices fell for the fifth month in a row in July, dealing a blow to prime minister Shinzo Abe and his bid to combat deflation.
Annual deflation deepened last month, with consumer prices falling by 0.5% in the year to July. It followed a 0.4% drop in June and was the biggest fall in more than three years as businesses delayed price hikes because of weak demand.Annual deflation deepened last month, with consumer prices falling by 0.5% in the year to July. It followed a 0.4% drop in June and was the biggest fall in more than three years as businesses delayed price hikes because of weak demand.
The data will intensify the pressure on Japan’s central bank to announce more stimulus, on top of the huge amount of money it has already pumped into the world’s third largest economy.The data will intensify the pressure on Japan’s central bank to announce more stimulus, on top of the huge amount of money it has already pumped into the world’s third largest economy.
Marcel Thieliant, senior Japan economist at Capital Economics:Marcel Thieliant, senior Japan economist at Capital Economics:
While economic activity is on the mend, the slump in import prices suggests that underlying inflation will continue to fall in coming months.While economic activity is on the mend, the slump in import prices suggests that underlying inflation will continue to fall in coming months.
The Bank of Japan will find it increasingly difficult to blame falling energy prices for the decline in overall consumer prices.The Bank of Japan will find it increasingly difficult to blame falling energy prices for the decline in overall consumer prices.
UpdatedUpdated
at 12.34pm BSTat 12.34pm BST
12.13pm BST12.13pm BST
12:1312:13
Kansas City Fed president says inflation gains call for a near-term rate hike https://t.co/ruPn48gHVm pic.twitter.com/jqvWtH8W88Kansas City Fed president says inflation gains call for a near-term rate hike https://t.co/ruPn48gHVm pic.twitter.com/jqvWtH8W88
12.10pm BST12.10pm BST
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Ana Thaker, Market Economist at PhillipCapital UK, says investors will be looking to this afternoon’s US GDP number, as well as Yellen’s speech, for clues about the timing of the next rate rise.Ana Thaker, Market Economist at PhillipCapital UK, says investors will be looking to this afternoon’s US GDP number, as well as Yellen’s speech, for clues about the timing of the next rate rise.
Strong data combined with a hawkish Yellen could see the dollar rally as August comes to a close and markets look towards the [rate-setting] FOMC meeting in September.Strong data combined with a hawkish Yellen could see the dollar rally as August comes to a close and markets look towards the [rate-setting] FOMC meeting in September.
The Fed are relying on strong economic data to advocate a long anticipated rate hike so data over the last half of 2016 is crucial to both markets and the Fed in determining the direction of policy and markets. We are at a crucial point in the course of monetary policy for the Fed and data points are more pertinent than ever.The Fed are relying on strong economic data to advocate a long anticipated rate hike so data over the last half of 2016 is crucial to both markets and the Fed in determining the direction of policy and markets. We are at a crucial point in the course of monetary policy for the Fed and data points are more pertinent than ever.
12.04pm BST12.04pm BST
12:0412:04
Markus Allenspach, head of fixed income research at Julius Baer, says Yellen is unlikely to give any clear signals about September’s Fed meeting:Markus Allenspach, head of fixed income research at Julius Baer, says Yellen is unlikely to give any clear signals about September’s Fed meeting:
For weeks already, the market is waiting anxiously for Yellen’s speech, as members of the Federal Reserve often presented conflicting views in the public about the necessity and timing of rate hikes.For weeks already, the market is waiting anxiously for Yellen’s speech, as members of the Federal Reserve often presented conflicting views in the public about the necessity and timing of rate hikes.
We doubt, however, that Yellen will give clear directions today; in her view, monetary policy decisions are taken by the FOMC as a committee.We doubt, however, that Yellen will give clear directions today; in her view, monetary policy decisions are taken by the FOMC as a committee.
11.55am BST11.55am BST
11:5511:55
Kansas Fed president: it's time to normalise ratesKansas Fed president: it's time to normalise rates
Esther George, president of the Kansas City Federal Reserve and host of the Jackson Hole meeting, has been speaking to Bloomberg from the event.Esther George, president of the Kansas City Federal Reserve and host of the Jackson Hole meeting, has been speaking to Bloomberg from the event.
Having already voted against the majority for a rate rise, she suggests she’ll vote again for higher rates at the Fed’s September meeting.Having already voted against the majority for a rate rise, she suggests she’ll vote again for higher rates at the Fed’s September meeting.
When I look at where we are with the job market, when I look at inflation and our forecasts for that, I think it’s time to move.When I look at where we are with the job market, when I look at inflation and our forecasts for that, I think it’s time to move.
Where it will look by the September meeting we’ll have to wait and see if anything changes fundamentally.Where it will look by the September meeting we’ll have to wait and see if anything changes fundamentally.
Great Bloomberg video interview with Esther George host of Fed Economic Summit in Jackson Hole, WY.https://t.co/KyPQfgOdMDGreat Bloomberg video interview with Esther George host of Fed Economic Summit in Jackson Hole, WY.https://t.co/KyPQfgOdMD
Ahead of Yellen’s speech, traders are forecasting a one in three chance of a US rate rise in September.Ahead of Yellen’s speech, traders are forecasting a one in three chance of a US rate rise in September.
11.35am BST11.35am BST
11:3511:35
Back to the main event of the day in Jackson Hole, Wyoming.Back to the main event of the day in Jackson Hole, Wyoming.
Once Friday’s proceedings get underway at Jackson Lake Lodge, we won’t have long to wait for Janet Yellen’s speech as the chair of the US Federal Reserve is first up at 8am Mountain Time (3pm in the UK).Once Friday’s proceedings get underway at Jackson Lake Lodge, we won’t have long to wait for Janet Yellen’s speech as the chair of the US Federal Reserve is first up at 8am Mountain Time (3pm in the UK).
The meeting runs from 8am to 2pm on both Friday and Saturday, with a series of papers presented, speeches given, and discussions held. As Larry Elliott, the Guardian’s economics editor put it, “Jackson Hole is Davos for central bankers”.The meeting runs from 8am to 2pm on both Friday and Saturday, with a series of papers presented, speeches given, and discussions held. As Larry Elliott, the Guardian’s economics editor put it, “Jackson Hole is Davos for central bankers”.
The Bank of England’s Minouche Shafik will give a speech titled adapting to changes in the financial market landscape at 3.50pm UK time.The Bank of England’s Minouche Shafik will give a speech titled adapting to changes in the financial market landscape at 3.50pm UK time.
Other topics up for discussion on Friday include negative interest rates, and “alternative monetary frameworks”. The main topic on Saturday is central bank balance sheets.Other topics up for discussion on Friday include negative interest rates, and “alternative monetary frameworks”. The main topic on Saturday is central bank balance sheets.
The full agenda is published here.The full agenda is published here.
11.10am BST11.10am BST
11:1011:10
Martin Beck, senior economic advisor to the EY Item Club, says predictions of a self-inflicted Brexit recession are overdone.Martin Beck, senior economic advisor to the EY Item Club, says predictions of a self-inflicted Brexit recession are overdone.
An uncertainty-driven slowdown still seems likely. But with a number of recent surveys from the CBI and others showing bouncebacks from post-vote lows, strong official retail sales numbers for July, and the support offered by the package of measures announced by the Bank of England, predictions that the economy will fall into recession look unduly pessimistic.An uncertainty-driven slowdown still seems likely. But with a number of recent surveys from the CBI and others showing bouncebacks from post-vote lows, strong official retail sales numbers for July, and the support offered by the package of measures announced by the Bank of England, predictions that the economy will fall into recession look unduly pessimistic.
11.00am BST11.00am BST
11:0011:00
Pound rises as UK consumer confidence jumpsPound rises as UK consumer confidence jumps
The pound is up slightly against the dollar at $1.3203 (+0.1%). It is flat against the euro at €1.688.The pound is up slightly against the dollar at $1.3203 (+0.1%). It is flat against the euro at €1.688.
UK data this week has generally been better-than-expected and a survey published overnight by YouGov/Cebr showed a surge in consumer confidence in August.UK data this week has generally been better-than-expected and a survey published overnight by YouGov/Cebr showed a surge in consumer confidence in August.
The headline index increased 3.2 points to 109.8 in August. It was the biggest monthly jump since February 2013 after the economy performed better than expected.The headline index increased 3.2 points to 109.8 in August. It was the biggest monthly jump since February 2013 after the economy performed better than expected.
The August rise followed a sharp drop in July, suggesting initial shock and fears over the June Brexit vote subsided this month.The August rise followed a sharp drop in July, suggesting initial shock and fears over the June Brexit vote subsided this month.
YouGov interviews about 6,000 consumers a month, asking them about their household finances, property prices, job security and business activity in the workplace.YouGov interviews about 6,000 consumers a month, asking them about their household finances, property prices, job security and business activity in the workplace.
The only indicator to show a drop in August was job security over the next 12 months.The only indicator to show a drop in August was job security over the next 12 months.
10.39am BST10.39am BST
10:3910:39
Here is the Guardian’s full story on the second estimate of Q2 growth, which was confirmed at 0.6%:Here is the Guardian’s full story on the second estimate of Q2 growth, which was confirmed at 0.6%:
10.38am BST10.38am BST
10:3810:38
Samuel Tombs at Pantheon Macroeconomics is decidedly gloomy about the outlook for the UK economy. He says consumers will start to feel the pinch from rising inflation next year:Samuel Tombs at Pantheon Macroeconomics is decidedly gloomy about the outlook for the UK economy. He says consumers will start to feel the pinch from rising inflation next year:
Looking ahead, consumers might be able to maintain strong growth in their spending for another quarter, but when inflation picks up in earnest early next year and firms follow through on plans to freeze hiring, they will have to slow down.Looking ahead, consumers might be able to maintain strong growth in their spending for another quarter, but when inflation picks up in earnest early next year and firms follow through on plans to freeze hiring, they will have to slow down.
Meanwhile, the slight rise in business investment in Q2 provides little reassurance about the post-referendum outlook, since few businesses anticipated the Leave vote and surveys suggest firms are recoiling from major financial commitments in Q3.Meanwhile, the slight rise in business investment in Q2 provides little reassurance about the post-referendum outlook, since few businesses anticipated the Leave vote and surveys suggest firms are recoiling from major financial commitments in Q3.
As a result, we continue to see a high risk that the economy enters a mild recession over the coming quarters.As a result, we continue to see a high risk that the economy enters a mild recession over the coming quarters.
10.30am BST10.30am BST
10:3010:30
Deloitte’s chief economist Ian Stewart, says the consumer recovery is going strong:Deloitte’s chief economist Ian Stewart, says the consumer recovery is going strong:
The UK entered the post-referendum period with good momentum.The UK entered the post-referendum period with good momentum.
Household spending accounts for roughly two-thirds of the economy and is growing at the fastest rate in eight years. We see few signs that Brexit has derailed the consumer recovery.Household spending accounts for roughly two-thirds of the economy and is growing at the fastest rate in eight years. We see few signs that Brexit has derailed the consumer recovery.
10.25am BST10.25am BST
10:2510:25
Scott Bowman at Capital Economics, says the Brexit vote will weigh on growth in the second half of the year:Scott Bowman at Capital Economics, says the Brexit vote will weigh on growth in the second half of the year:
UK households shrugged off pre-referendum uncertainty, driving an acceleration in GDP growth in the second quarter.UK households shrugged off pre-referendum uncertainty, driving an acceleration in GDP growth in the second quarter.
Looking ahead, growth looks set to slow significantly in the second half of the year as uncertainty related to the Brexit vote takes its toll.Looking ahead, growth looks set to slow significantly in the second half of the year as uncertainty related to the Brexit vote takes its toll.
We think that growth will fall to around zero in Q3 and Q4, mainly due to falls in business investment.We think that growth will fall to around zero in Q3 and Q4, mainly due to falls in business investment.
10.11am BST10.11am BST
10:1110:11
Here are three key charts from the second estimate of Q2 growth, which came in at 0.6%...Here are three key charts from the second estimate of Q2 growth, which came in at 0.6%...
1. The UK economy has grown every quarter since the first quarter of 2013:1. The UK economy has grown every quarter since the first quarter of 2013:
2. On the output side of the economy, only the services sector is back above pre-crisis levels:2. On the output side of the economy, only the services sector is back above pre-crisis levels:
3. Households shrugged off uncertainty in the run-up to the 23 June referendum, as consumer spending continued to be a key driver of growth:3. Households shrugged off uncertainty in the run-up to the 23 June referendum, as consumer spending continued to be a key driver of growth:
UpdatedUpdated
at 10.15am BSTat 10.15am BST